CORPORATE GOVERNANCE REPORT
The pursuit towards achieving good governance is an ongoing process at Jindal Drilling & Industries Ltd. (JDIL), as a conscious effort. The Company always focuses on good corporate governance - which is a key driver of sustainable corporate growth and long-term value creation. Your Company believes in conducting its affairs with the highest levels of integrity, with proper authorizations, accountability, disclosure and transparency.
The Securities and Exchange Board of India (SEBI) amended the Listing Agreement effective from 1st October, 2014, to bring in additional corporate governance norms for listed entities. These norms provide for stricter disclosures and protection of investors' rights.
The details of the Corporate Governance compliance by Company as per the Clause 49 of the Listing Agreement with Stock Exchanges are as under:
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Corporate governance is the system by which Companies are directed and managed. Good corporate governance structure encourages Companies to create value (through entrepreneurism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved.
Jindal Drilling believes in ensuring true Corporate Governance Practices to enhance long term shareholders' value through corporate performance, transparency, integrity and accountability.
2. BOARD OF DIRECTORS
The Board of Directors of the Company consists of an optimal mix of Executive Directors and Independent Professionals who have in-depth knowledge of business, in addition to expertise in their areas of specialization. The Directors bring in expertise in the fields of human resource development, strategy, management, finance and economics among others. The Board provides leadership, strategic guidance, objective and independent view to the Company's management while discharging its fiduciary responsibilities, thereby ensuring that management adheres to high standards of ethics, transparency and disclosure.
The Board, as on 3lst March, 20l5 consisted of 5 Directors including one Executive Chairman, who is also a promoter of the Company, one Managing Director, and the rest as Non- Executive Directors. The Board meets the requirement of not less than one half being independent Directors. The size and composition of the Board conforms to the requirements of Clause 49 of the Listing Agreement (Corporate Governance Code) with the Stock Exchanges.
None of the Directors hold Chairmanship of more than 5 Committees or Membership in more than l0 committees of the Companies.
Board Functioning & Procedure
Jindal Drilling believes that at the core of its corporate governance practice is the Board, which oversees how the management serves and protects the long-term interests of all stakeholders of the company. An active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance.
Jindal Drilling believes that composition of Board is conducive for making decisions expediently, with the benefit of a variety of perspectives and skills, and in the best interests of the Company as a whole rather than of individual shareholders or interest groups.
In accordance with the provisions of Clause 49 of the Listing Agreement, the Board meets at least once in every quarter to review the quarterly results and other items of agenda as required under Clause 49 of Listing Agreement.
During the financial year 2014-15, 6 (Six) Board Meetings were held on 24th May 2014, 6th August 2014, 10th November 20l4, 28th January 20l5, 6th February 20l5, and 5th March 20l5.
The Composition of Board of Directors, their shareholding, attendance during the year and at the last Annual General Meeting, Number of other Directorships, Committee memberships and Chairmanships held by them as at 31st March, 2015 are given below:
Note: l. Only Audit and Stakeholders' Relationship Committees are considered.
2. Excludes directorship in foreign companies. No Director is related to any other Director, except Shri Raghav Jindal, who is the son of Shri D.P. Jindal.
INDEPENDENT DIRECTORS MEETING
The Company's Independent Directors meet atleast once in every financial year without the presence of Executive Directors or management personnel, inter alia, to discuss:
- the performance of Non Independent Directors & Board of Directors as a whole.
- the performance of the Chairman of the Company, taking into account the views of the Executive & Non-Executive Directors.
- the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively perform its duties.
During the year under review, the Independent Directors met on 3lst March, 20l5. All the Independent Directors were present at the meeting.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Directors are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company's procedures & practices.
Detailed presentations on the Company's business segments were made at the separate meeting of the Independent Directors. The detail of familiarization programmes for Independent Directors are posted on the Company's website www.jindal.com
CODE OF CONDUCT
The Board of Directors has adopted the Code of Conduct for Directors (incorporating duties of Independent Directors as laid down in the Companies Act, 20l3) and Senior Management personnel. The Code has also been posted on the Company's website www.jindal.com
The Code has been circulated to all members of the Board and senior management personnel and the compliance with the Code of Conduct is affirmed by them annually.
A declaration signed by the CEO and Managing Director of the Company is given below:
This is to certify that all Board Members and Senior Management personnel have affirmed compliance with Code of Conduct for Directors and Senior Management for the financial year ended 31st March, 2015.
The terms of reference of the Audit Committee are as per guidelines set out in the revised Listing agreement read with Section 177 of the Companies Act, 2013. The Audit Committee provides directions to the audit functions and monitors the quality of internal and statutory audit.
The responsibilities of the Audit Committee include overseeing the financial reporting process, to ensure fairness, sufficiency and credibility of financial statements, review findings of internal auditors relating to various functions, recommendation of appointment and removal of statutory auditors, internal auditors and cost auditors and fixation of their remuneration; review of the quarterly and annual financial statements before submission to the Board With particular reference to matters required to be included in the Directors' 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; review of adequacy and compliance of internal control systems and the internal audit function; review of compliance with laws; inspection of records and audit reports and reports of statutory auditors; review of findings of internal investigations; review of statement of significant related party transactions; review of management letters/letter of internal control, weaknesses issued by statutory auditors, discussion on the scope of audit with external auditors and examination of reasons for substantial defaults, if any in the payment to shareholders; review the functioning of the Whistle Blower mechanism etc.
The Audit Committee of the Company comprises of 3 Directors including 2 Independent Non-executive Directors. All members of the Committee possess knowledge of Corporate Finance, Accounts and Company Law. The Chairman of the Committee is an Independent Non-executive Director and was present at the last Annual General Meeting of the Company. The Audit Committee meetings are attended by the Internal & Statutory Auditors, Accounts and Finance Heads. The Company Secretary acts as the Secretary to the Audit Committee.
The Company has appointed a firm of Chartered Accountants as Internal Auditors to review the internal control systems of the Company and to report thereon. The Audit Committee reviews the reports of the Internal Auditors periodically.
4. NOMINATION AND REMUNERATION COMMITTEE
The terms of reference of the Nomination & Remuneration Committee are as per guidelines set out in the Listing agreement read with Section l78 of the Companies Act, 20l3.
The said Committee has been entrusted to formulate the criteria for determining qualification, positive attributes and independence of a Director and recommend to the Board a policy relating to remuneration for the Directors, key managerial personnel and other employees, formulation of criteria for evaluation of independent Directors and the Board, devising a policy on Board diversity, 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 etc
During the year under review meeting of the Nomination & Remuneration Committee was held on 5th February, 2015. Remuneration Policy
The Remuneration Policy of the Company is designed to attract, motivate, improve productivity and retain manpower, by creating a congenial work environment, encouraging initiatives, personal growth and team work, and inculcating a sense of belonging and involvement, besides offering appropriate remuneration packages. The policy reflects the Company's objectives for good corporate governance as well as sustained long- term value creation for shareholders. This Remuneration Policy applies to directors, senior management including its Key Managerial Personnel (KMP) and other employees of the Company.
As per the Policy followed by the Company, the Non-Executive Directors are paid remuneration in the form of sitting fees for attending Board and Committee meetings as fixed by the Board of Directors from time to time subject to statutory provisions. Presently sitting fee is Rs. 50,000 per Board meeting and Rs. 10,000 per Audit Committee and Independent Directors' meeting.
Remuneration of Whole Time Directors including Managing Director reflects the overall remuneration philosophy and guiding principles of the Company. When considering the appointment and remuneration of Whole Time Directors, due consideration is given to pay and employment conditions in the industry, merit and seniority of the person and the paying capacity of the Company.
Remuneration packages for Whole Time Directors are designed subject to the limits laid down under the Companies Act, 2013 to remunerate them fairly and responsibly. The Whole Time Directors' remuneration comprises of salary, perquisites and retirement benefits like P.F., Gratuity, etc as per Rules of the Company.
The Whole Time Directors are entitled to customary non-monetary benefits such as company's car, furnished accommodation, health care benefits, leave travel, communication facilities, etc.
Appointment of KMP & Senior management and cessation of their service are subject to the approval of the NRC and the Board of Directors. Remuneration of KMP and other senior management personnel is decided by the Managing Director (MD), broadly based on the Remuneration Policy in respect of Whole Time Directors.
The remuneration of other employees is fixed from time to time as per the guiding principles outlined above and considering industry standards and cost of living. In addition to basic salary they are also provided perquisites and retirement benefits as per schemes of the Company and statutory requirements, where applicable. Policy of motivation/ reward/ severance payments are applicable to this category of personnel as in the case of those in the management cadre.
This Remuneration Policy shall continue to guide all future employment of Directors, Company's Senior Management including Key Managerial Personnel and other employees.
Any departure from the policy can be undertaken only with the approval of the Board of Directors.
REMUNERATION TO DIRECTORS
5. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Your Directors have constituted the Corporate Social Responsibility Committee in reference to the requirements of Section 135 of the Companies Act, 2013.
The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.
During the year under review, the said committee met on 28th January, 2015. All the members were present in the meeting
6. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Committee under the Chairmanship of Non Executive Director. The Committee meets periodically, to approve inter-alia, transfer/transmission of shares, issue of duplicate share certificates and reviews the status of investors' grievances and redressal mechanism and recommends measures to improve the level of investor services. Details of shares transfers/ transmissions approved by the Committee are placed at the Board Meetings from time to time.
i) Related Party Transactions
There have been related party transactions as reflected in notes to the accounts but they are not in conflict with the interest of the Company. All transactions have been approved by the Audit Committee.
The Board has approved a policy on materiality of Related Party Transactions which has been uploaded on the website of the Company at the following link <http://jindal.com/jdil/pdf/RPT-POLICY-JDIL.pdf>
ii) Accounting Standards
The Company follows the Accounting Standards laid down by the Institute of Chartered Accountant of India and there has been no deviation during the year.
iii) Details on Non Compliance
There are no instances of non-compliance by the Company on any matter relating to the Capital Market during the last 3 years.
iv) CEO/CFO Certificates
Shri Raghav Jindal, Managing Director and Shri Pawan Kumar Rustagi, CFO have furnished the required certificate to the Board of Directors pursuant to Clause 49 of the Listing Agreement.
v) Whistle Blower Policy
The Company has adopted a Whistle blower policy and has established the necessary Vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. No person has been denied access to the Chairman of the Audit Committee. The said policy has been disclosed on the Company's website under the web link <http://jindal.com/jdil/pdf/Vigil-Mechanism-JDIL.pdf>
vi) Adoption of Mandatory and Non- mandatory requirements of Clause 49
The Company has complied with all mandatory requirements of Clause 49 of the Listing Agreement. However, the Company has also complied with following non-mandatory requirements of Clause 49 of Listing Agreement.
The Financial Statements of the Company are unqualified. Separate posts of Chairman and CEO
The positions of Chairman and CEO/ Managing Director are separate. Reporting of Internal Auditors
The Internal Auditors of the Company make presentations to the Audit Committee on their reports.
vii) Risk Management
The Company has detailed Risk Management Policy and the Board periodically reviews the procedures for its effective management.
9. MEANS OF COMMUNICATION
The Company's financial results are communicated forthwith to all the Stock Exchanges with whom the Company has listing arrangements, as soon as they are approved and taken on record by the Board of Directors of the Company. Thereafter the results are normally published in Business Standard, Free Press Journal and Navshakti. The Financial Results, Press Releases and Presentations made to institutional investors are also available on the Company's website www.jindal.com
Designated Exclusive e-mail ID: The Company has designated the following e-mail ID exclusively for investor grievance redressal:- email@example.com
10. GENERAL SHAREHOLDERS INFORMATION
a) Annual General Meeting
Date & Time : 28th September, 2015 at 2.30 P.M.
Venue : Pipe Nagar, Village Sukeli, N.H. 17, B.K.G Road, Taluka Roha, Distt. Raigad, Maharashtra - 402126
b) Period : 1st April 2014 to 31st March, 2015
c) Book Closure : 18th August, 2015 to 20th August, 2015 ( Both days inclusive)
d) Dividend : Rs. 0.50 per share (i.e. @ 10%) for the year ended 31st March, 2015, if approved by the members, would be payable on or after 29th September, 2015.
Financial Calendar (Tentative):
- Financial results for the quarter ended 30th June, 2015 Aug 2015
- Financial results for the quarter ending 30th September, 2015 Oct/Nov 2015
- Financial results for the quarter ending 31st December, 2015 Jan/Feb 2016
- Financial results for the quarter/year ending 31st March, 2016 April/May 2016 Listing on Stock Exchanges:
The Equity Shares of the Company are listed at the following Stock Exchanges:
i) BSE Limited, 25th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.
ii) National Stock Exchange of India Limited, 'Exchange Plaza', Bandra - Kurla Complex, Bandra (East), Mumbai - 400 051. The listing fee for the financial year 2015-16 has been paid to BSE and NSE.
NSDL/ CDSL - ISIN INE742C0I03I
Dematerialization of Shares and Liquidity
The Company's shares are compulsorily traded in dematerialized form. As on 3Ist March, 20I5 - 99.56 % of total equity shares were held in dematerialized form.
Outstanding GDR / Warrants and Convertible Bonds, conversion date and likely impact on equity:
There is no outstanding GDR/Warrants and Convertible Bonds etc.
Operations : Rigs & Directional Drilling equipments operating at Mumbai offshore.
: Mud logging operations onshore & offshore.
Registrar and Share Transfer Agents:
Alankit Assignments Limited, Alankit Heights, I-E/I3, Jhandelwalan Extension, New Delhi - 110 055 Phone: 0II-2354I234, 4254I234 Fax: 0II-4254I967 E-mail: firstname.lastname@example.org
Share Transfer System:
Share transfer requests received in physical form are registered within 15 days from the date of receipt and demat requests are normally confirmed within the prescribed time from the date of receipt.
Investors' correspondence address
Shareholders' correspondence should be addressed to the Registrar and Transfer Agent at the address given here above. Shareholders holding shares in dematerialized form should address all their correspondence to their respective Depository Participants.