CORPORATE GOVERNANCE REPORT
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:
Corporate Governance is an integral part of values, ethics and best business practices followed by the Company. The core values of the Company are:
• commitment to excellence and customer satisfaction
• maximising long term shareholders' value
• socially valued enterprise and
• caring for people and environment.
In a nutshell, the philosophy can be described as observing of business practices with the ultimate aim of enhancing long term shareholders' value and commitment to high standard of business ethics by following best corporate governance norms in true letter and spirit. The Company has in place a Code of Corporate Ethics and Conduct reiterating its commitment to maintain the highest standards in its interface with stakeholders and clearly laying down the core values and corporate ethics to be practiced by its entire management cadre.
2. BOARD OF DIRECTORS:
As at 31st March 2015, the Board of Directors of the Company, consists of Ten Directors comprising of six Nonexecutive Directors (NED) of which five are independent (IND). Four Board Meetings were held during the Financial Year 2014-15 ended 31st March 2015, on 22nd May 2014, 25th July 2014, 30th October 2014 and 4th February 2015.
The Board periodically reviews Compliance reports of all laws applicable to the Company and the steps taken by the Company to rectify instances of non-compliances, if any. During the year, the Company has implemented a web based legal compliance tool called "Compliance Manager" developed by Ernst & Young (EY), with a view to foster an improved compliance reporting and monitoring in the Company. Further, legal risks are mitigated through regular review of changes in the regulatory framework to ensure compliance with all the applicable statutes. The Board is also satisfied that plans are in place for orderly succession for appointments to the Board and to senior management.
The Company has a Code of Conduct for Management Cadre Staff (including Executive Directors), which is strictly adhered to. In terms of the provisions of Clause 49 of the Listing Agreement and contemporary practices of good corporate governance, a Code of Conduct was laid down by the Board for all the Board Members and Senior Management of the Company. The said Code is available on the Company's website (www.jklakshmicement.com). All the Board Members and Senior Management Personnel have affirmed compliance with the said Code. This Report contains a declaration to this effect signed by Smt. Vinita Singhania, Vice Chairman & Managing Director.
3. SEPARATE MEETING OF THE INDEPENDENT DIRECTORS
In accordance with the provision of Schedule IV to the Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate meeting of the Independent Directors of the Company was held on 4th February 2015. Shri Nand Gopal Khaitan was unanimously elected as Chairman of the meeting and all the Independent Directors of the Company were present at the said Meeting except Shri B.V.Bhargava to whom leave of absence was granted.
4. FAMILIARISATION PROGRAMME INDEPENDENT DIRECTORS FOR
In accordance with the provisions of Clause 49 of the Listing Agreement, the Company has been conducting various familarisation programmes. The details of such familarisation programmes for Independent Directors have been disclosed on the website of the Company, the web link for which is www.jklakshmicement.com/companys-policy/
5. PERFORMANCE EVALUATION
The Board of Directors has made formal annual evaluation of its own performance and that of its committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed under Clause 49 of the Listing Agreements with Stock Exchanges.
Performance of the Board was evaluated after seeking inputs from all the Directors on the basis of the criteria such as adequacy of its composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as composition of committees, terms of reference of committees, effectiveness of the committee meetings, participation of the members of the committee in the meetings, etc.
The Board and the Nomination and Remuneration Committee also carried out evaluation of the performance of individual directors on the basis of criteria such as attendance and effective participation and contributions at the meetings of the Board and its committees, exercise of his/her duties with due & reasonable care, skill and diligence, etc.
In a separate meeting of the Independent Directors of the Company, performance of non-independent Directors, performance of Board as a whole and performance of Chairman & Managing Director was evaluated, taking into account the views of executive directors of the Company. The Chairman of the Meeting of the Independent Directors apprised the Board about the evaluation carried by it and that the Independent Directors were fully satisfied in this regard.
6. AUDIT COMMITTEE
The Company has an Audit Committee of Directors since 1987. The composition and the 'Terms of Reference' of the Committee are in conformity with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.
The Committee consists of four Directors, out of which three are Independent Directors and one is Non-executive Director. Four meetings of the Audit Committee were held during the financial year ended 31st March 2015.
All the Committee Meetings were attended by the Head of Finance Function, the Head of Internal Audit, Company Secretary and the Statutory Auditor. The Company Secretary acts as the Secretary of the Committee.
7. STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Company has a Stakeholders' Relationship Committee at the Board Level which consists of three Directors out of which two are Non-executive Directors of which one is Independent. The composition and the 'Terms of Reference' of the Committee are in conformity with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
Shri B.K. Daga, Vice President & Company Secretary, is the Compliance Officer who oversees the investors' grievances including related to Transfer of shares, Non-receipt of balance sheet and dividends etc. During the financial year ended 31st March 2015, the Company received only three complaints from the investors and the same have since been resolved to the satisfaction of shareholders. Also, there are no complaints pending in respect of previous period.
The Board has delegated the power of share transfer to a Committee of Directors and the share transfer formalities are attended as required. All valid requests for transfer of shares in physical form were processed in time and there were no pending transfers of shares. During the financial year ended 31st March 2015, 27 Meetings of this Committee were held.
8. NOMINATION AND REMUNERATION COMMITTEE:
The Company has a 'Nomination and Remuneration Committee' comprising of three Directors, all being Nonexecutive Independent Directors. The composition and the role of the Committee are in conformity with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. During the financial year, one Meeting of the Committee was held on 25th July 2014 to reconstitute and revise the Terms of Reference of the Committee and annual increments to Managing Directors of the Company for the financial year 2014-15.
9. NOMINATION AND REMUNERATION POLICY:
In accordance with the provisions of the Companies Act 2013 and Clause 49 of the Listing Agreement, the Company has put in place the Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees of the Company including criteria for determining qualifications, positive attributes, independence of a Director as well as a policy on Board Diversity. The policy provides as follows:
(i) The Nomination and Remuneration Committee of Directors (the Committee) shall take into consideration the following criteria for recommending to the Board for appointment as a Director of the Company: (a) Qualifications & experience. (b) Positive attributes like - respect for Company's core values, professional integrity, strategic capability with business vision, etc. (c) In case the proposed appointee is an Independent Director, he should fulfill the criteria for appointment as Independent Director as per the applicable laws & regulations. (d) The incumbent should not be disqualified for appointment as Director pursuant to the provisions of the Act or other applicable laws & regulations.
(ii) The Committee will recommend to the Board appropriate compensation to Executive Directors subject to the provisions of the Act, Listing Agreement with Stock Exchanges and other applicable laws & regulations. The Committee shall periodically review the compensation of such Directors in relation to other comparable companies and other factors, the Committee deems appropriate. Proposed changes, if any, in the compensation of such Directors shall be reviewed by the Committee subject to approval of the Board.
(iii) The Board will review the performance of a Director as per the structure of performance evaluation adopted by the Board for Directors including Executive Directors.
(iv) The Committee will review from time to time Board diversity to bring in professional performance in different areas of operations, transparency, corporate governance, financial management, risk assessment & mitigation strategy and human resource management in the Company. The Company will keep succession planning and board diversity in mind in recommending any new name of Director for appointment to the Board.
(v) The eligibility criteria for appointment of Key Managerial Personnel (KMPs) and other senior management personnel shall vary for different positions depending upon the job description of the relevant position. In particular, the position of KMPs shall be filled by senior personnel having relevant qualifications and experience. The Compensation structure for KMPs and other senior management personnel shall be as per Company's remuneration structure taking into account factors such as level of experience, qualification and suitability which shall be reasonable and sufficient to attract, retain and motivate them. The remuneration would be linked to appropriate performance benchmarks. The remuneration may consist of fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
10. REMUNERATION PAID TO DIRECTORS
(i) Executive Directors: The aggregate value of salary, perquisites and contribution to Provident Fund and Superannuation Funds for the financial year ended 31st March 2015 to the Managing Directors and Whole-time Directors is as follows: Shri Bharat Hari Singhania -Rs.363.68 lacs, Smt. Vinita Singhania - Rs. 386.76 lacs, Shri Sushil Kumar Wali 225.68 lacs and Dr. Shailendra Chouksey - Rs. 225.29 lacs .
The Company does not have any Stock Option Scheme. In case of Whole-time Directors, notice period is six months. Severance fee for the Managing Directors is remuneration for the unexpired residue terms or for three years, whichever is shorter.
(ii) Non-executive Directors: During the financial year 2014-15, the Company paid sitting fees aggregating to ^ 18,50,000 to all the Non-executive Directors (NEDs) for attending the meetings of the Board and Committees of Directors of the Company. Commission payable to NEDs: Rs. 7 lacs each to Shri B. V. Bhargava, Shri Nand Gopal Khaitan, Dr. Raghupati Singhania, Shri Kashi Nath Memani, Shri Pradeep Dinodia, Shri Ravi Jhunjhunwala and Rs. 3 lacs to Shri Raj Kumar Bansal (IDBI Nominee - payable to IDBI). The Non-executive Directors did not have any other material pecuniary relationship or transactions vis-a-vis the Company during the year except as stated above.
The number of Equity Shares held by Non-executive Directors: Shri B.V. Bhargava - 6,660 shares, Shri Nand Gopal Khaitan - 20,924 shares and Dr. Raghupati Singhania - 1,77,948 shares. Shri Kashi Nath Memani, Shri Pradeep Dinodia and Shri Ravi Jhunjhunwala do not hold any shares. The Company does not have any outstanding convertible instruments.
11. CORPORATE SOCIAL RESPONSIBILITY COMMITEE
The Corporate Social Responsibility Committee (CSR Committee) was constituted on 22nd May 2014, pursuant to Section 135 of the Companies Act 2013 and the Rules made thereunder. This Committee meets the criteria laid down under Section 135 of the Companies Act, 2013 and Rules made therein.
12. CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee of Directors of the Company comprises of Shri Pradeep Dinodia (Chairman/ Independent Director), Dr. Shailendra Chouksey and Shri Sushil Kumar Wali. The Committee met on 16th May 2014 and on 6th August 2015 to oversee compliance by the Company of the provisions of the Corporate Governance contained in the Clause 49 of the Listing Agreement.
(i) Related Party Transactions: Disclosures on materially significant related party transactions that may have potential conflict with the interests of the Company at large:
None. Suitable disclosure as required by Accounting Standard(AS-18)-Related Party Transactions has been made in the Annual Report.
All the Related Party Transactions are dealt with in accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Company has also formulated a policy on the materiality of Related Party Transactions and also on dealing with Related Party Transactions. This Policy is available on the website of the Company and the weblink for the same is www.jklakshmicement.com/companys-policy/
(ii) Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or SEBI or any Statutory Authority, on any matter related to capital market, during the last three years: There were no cases of non-compliance of any matter related to capital markets during the last three years.
(iii) Vigil Mechanism/Whistle Blower Policy: The Board of Directors of the Company at its meeting held on 25th July 2014 has established a Policy on Vigil Mechanism for the Directors and Employees of the Company to report their genuine concerns or grievances relating to actual or suspected fraud, unethical behaviour, violation of the Company's Code of Conduct or Ethics Policy, and any other event which would adversely affect the interests of the business of the Company. Whistle Blowers may send their concerns/complaints to the Chairman of Audit Committee in a sealed envelope marked confidential, for appropriate action.
The details of establishment of such mechanism has been also disclosed on the website of the Company. It is affirmed that no personnel has been denied access to the Audit Committee.
(iv) Prevention of Sexual Harassment of Women at Workplace: Your Company is sensitive to women employees at workplace. As required under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has a formal policy to ensure safety of women and prevention of sexual harassment and has set up Internal Complaints Committee (ICC) at its work places to redress the complaints of women employees.
During the year, no complaint has been filed with ICC with allegation of Sexual Harassment.
(v) Risk Management: The Company has an elaborate risk management system to inform Board Members about risk assessment and minimization procedures. A Risk Management Committee headed by a Whole-time Director meets on quarterly basis and evaluates the efficacy of the framework relating to risk identification and its mitigation laid down by the Committee. Board Members are accordingly informed.
(vi) Subsidiary Companies: The financial statements, in particular, the investments made by the unlisted subsidiary companies, if any, are reviewed by the Audit Committee. The Company does not have any material unlisted subsidiary as defined in Clause 49 of the Listing Agreement.
The minutes of the Board meetings of the unlisted subsidiary companies are placed at the Board meeting of the Company. A statement of all significant transactions and arrangements entered into by the unlisted subsidiary companies, if any, are also placed at the Board meeting of the Company.
15. MEANS OF COMMUNICATION
Quarterly, half-yearly and annual results are normally published in the leading English newspapers, namely, The Financial Express , Business Standard, Hindustan Times, Hindu Business Line and one regional daily "Rajasthan Patrika" (Jaipur), having wide circulation and promptly furnished to the Stock Exchanges for display on their respective websites. The financial results are also displayed on the Company's website - www.jklakshmicement.com. Official news releases are also available on the Company's website.
"Management Discussion & Analysis" forms part of the Annual Report.
16. GENERAL SHAREHOLDERS' INFORMATION
(i) Annual General Meeting (AGM)
(a) Date and Time :
Please refer to Notice for the AGM being sent along with the Annual Report.
Regd. Office: Jaykaypuram - 307019, Basantgarh, Dist. Sirohi, (Rajasthan).
(b) As required under Clause 49(VIII)(E)(1), a brief resume and other particulars of Directors seeking appointment or re-appointment at the aforesaid AGM are given in the Notes to the Notice convening the said AGM.
(ii) Financial Calendar (Tentative)
• for the quarter ending 30.06.2015: Within 45 days of the end of the quarter
• for the half-year ending 30.09.2015 :Within 45 days of the end of the quarter
• for the quarter ending 31.12.2015 :Within 45 days of the end of the quarter
• for the year ending 31.03.2016 (Audited) :Within 60 days of the end of the financial year
• Annual General Meetingthe Financial Year ending 2015-16 :Between July and September 2016
(iii) Date of Book Closure:
As in the AGM Notice
(iv) Dividend Payment Date:
within three weeks of conclusion of AGM
(v) Listing on Stock Exchanges:
The Equity Shares of the Company (Face Value: X 5/-each) are listed on BSE Ltd. and National Stock Exchange of India Ltd. (NSE). The annual listing fee for the financial year 2015-16 has been paid to the said Stock Exchanges.
(vi) Security Code for Company's Equity Shares on Stock Exchanges and ISIN No.
BSE - 500380 and NSE - JKLAKSHMI,
ISIN No. :INE786A01032.
(vii) Share Transfer System
All valid requests for transfer/transmission of Equity shares held in physical form are processed within a period of 15 days from the date of receipt thereof and the Share Certificates duly transferred are immediately returned to the transferee/lodger. Transaction in the dematerialized Shares are processed by NSDL/CDSL through the Depository Participants with whom the shareholders have opened their demat account.
(viii) Dematerialisation of Shares and Liquidity
The Equity Shares of the Company are actively traded on BSE and NSE. Trading in the Equity Shares of the Company is permitted only in dematerialised form. Shareholders may therefore, in their own interest, dematerialise their holdings in physical form, with any one of the Depositories namelyNSDL and CDSL. The ISIN No. for Equity Shares of the Company for both the depositories is INE786A01032. As on 31st March 2015, 98.18% of the Equity Shares stand dematerialised. It may be noted that in respect of shares held in demat form, all the requests for nomination, change of address, ECS, Bank Mandate and rematerialisation etc. shall be made only to the Depository Participant (DP) of the Shareholders.
(ix) Outstanding GDRs/ADRs/Warrants/Options or any Convertible instruments, conversion date and likely impact on Equity:
As on 31st March 2015 - NIL.
(1) JK Lakshmi Cement Jaykaypuram-307 019, Basantgarh Dist. Sirohi Rajasthan
(2) JK Lakshmi Cement Village Motibhoyan, Taluka Kalol (N.G.),Distt. Gandhi Nagar - 382 721, Gujarat
(3) JK Lakshmi Cement Village Bajitpur PO Jhamri, Jhajjar-123 305, Haryana
(4) JK Lakshmi Cement Village Malpuri, Khurd Khasodih, P.O. Ahiwara Tehsil Dhandha,District Durg-490036 Chhattisgarh
(xi) Address for correspondence regarding share transfers and related matters
1. JK Lakshmi Cement Limited
Secretarial Department, Gulab Bhawan (Rear Block) 6A, Bahadur Shah Zafar Marg, New Delhi- 110 002. Ph:(011) 30179860 Fax Nos. 91-11-2373 9475
Contact Person: Mr. B.K.Daga (E-mail: firstname.lastname@example.org ).
2. Registrar & Share Transfer Agents - MCS Share Transfer Agent Ltd. (RTA)
F-65, First Floor, Okhla Indl. Area, Phase - I, New Delhi - 110 020,
Ph. (011) 41406149-52, Fax No. 91-11-41709881 (E-mail: email@example.com ).
Contact Person: Mr Ajay Dalal (E-mail: firstname.lastname@example.org).