REPORT ON CORPORATE GOVERNANCE for the year 2015-16
(Pursuant to Clause 49 of the Listing Agreement and Regulation 34 (3) and Schedule V (C) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015).
1. COMPANY'S GOVERNANCE PHILOSOPHY:
Corporate Governance at JSW Steel Limited has been a continuous journey and the business goals of the Company are aimed at the overall well- being and welfare of all the constituents of the system. The Company has laid a strong foundation for making Corporate Governance a way of life by constituting a Board with a balanced mix of experts of eminence and integrity, forming a core group of top level executives, inducting competent professionals across the organization and putting in place appropriate systems, process and technology.
At the heart of Company's Corporate Governance policy is the ideology of transparency and openness in the effective working of the management and Board. It is believed that the imperative for good Corporate Governance lies not merely in drafting a code of Corporate Governance but in practicing it.
Your Company confirms the compliance of Corporate Governance under Clause 49 of the Listing Agreement and as contained in Chapter IV of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI (LODR Regulations)") as amended, the details of which are given below:
2. BOARD OF DIRECTORS:
2.1 APPOINTMENT AND TENURE:
The Directors of the Company (except Nominee Directors) are appointed by the shareholders at General Meetings. All Executive Directors are subject to retirement by rotation and at every Annual General Meeting, 1/3rd of such Directors as are liable to retire by rotation, if eligible, generally offer themselves for re-election, in accordance with the provisions of Section 152 of the Companies Act, 2013 and that of the Articles of Association of the Company.
The Executive Directors on the Board serve in accordance with the terms of their contracts of service with the Company.
2.2 BOARD MEMBERSHIP CRITERIA:
Matching the needs of the Company and enhancing the competencies of the Board are the basis for the Nomination and Remuneration Committee to select a candidate for appointment to the Board. When recommending a candidate for appointment, the Nomination and Remuneration Committee:
i. assess the appointee against a range of criteria including qualification, age, experience, positive attributes, independence, relationships, diversity of gender, background, professional skills and personal qualities required to operate successfully in the position and has discretion to decide adequacy of such criteria for the concerned position;
ii. assess the appointee on the basis of merit, related skills and competencies. No discrimination is made on the basis of religion, caste, creed or gender.
2.3 BOARD COMPOSITION, CATEGORY OF DIRECTORS, MEETINGS AND ATTENDANCE RECORD OF EACH DIRECTOR:
The Company has a balanced mix of executive and nonexecutive Independent Directors. As at 31.03.2016, the Board of Directors comprises of 12 Directors, of which 8 are non-executive, including 1 woman director. The Chairman is executive and a Promoter of the Company. The number of Independent Directors is 6 which is in compliance with the stipulated one half of the total number of Directors. All Independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board thereby ensuring the best interest of stakeholders and the Company.
All Independent Directors meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and under Regulation (1)(b) of the SEBI (LODR Regulations).
No Director is related to any other Director on the Board in terms of the definition of "relative" as defined in Section 2(77) of the Companies Act, 2013. None of the Directors on the Board are Independent Directors of more than seven listed companies and none of the Whole-time Directors are Independent Directors of any listed company.
None of the Directors on the Board is a member of more than 10 committees and Chairperson of more than 5 committees (as specified in Regulation 26 (1) of SEBI (LODR Regulations)) across all the public Companies in which he/she is a Director. The necessary disclosures regarding committee positions in other public companies have been made by the Directors.
The information stipulated under Part A of Schedule II of SEBI (LODR Regulations) is being made available to the Board
2.4 BOARD MEETINGS, BOARD COMMITTEE MEETINGS AND PROCEDURES:
A. INSTITUTIONALISED DECISION MAKING PROCESS:
The Board of Directors oversees the overall functioning of the Company. The Board provides and evaluates the strategic direction of the Company, management policies and their effectiveness and ensures that the long-term interest of the stakeholders are being served. The Chairman and Managing Director is assisted by the Executive Directors/Senior Managerial Personnel in overseeing the functional matters of the Company.
The Board has constituted Thirteen Standing Committees, namely, Audit Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Project Review Committee, Finance Committee, Risk Management Committee, Business Responsibility/Sustainability Reporting Committee, Hedging Policy Review Committee, JSWSL ESOP Committee, Share Allotment Committee, Share/Debenture Transfer Committee and JSWSL Code of Conduct Implementation Committee. The Board constitutes additional functional committees, from time to time, depending on the business needs.
B. SCHEDULING AND SELECTION OF AGENDA ITEMS FOR BOARD MEETINGS:
i. A minimum of four Board Meetings are held every year. Dates for the Board Meetings in the ensuing quarter are decided well in advance and communicated to the Directors. The Agenda along with the explanatory notes are sent in advance to the Directors. Additional meetings of the Board are held when deemed necessary to address the specific needs of the Company. In case of business exigencies or urgency of matters, resolutions are passed by circulation.
ii. The meetings are usually held at the Company's Registered Office at JSW Centre, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051.
iii. All divisions/departments of the Company are advised to schedule their work plans well in advance, with regard to matters requiring discussion/approval/ decision at the Board/ Committee meetings. All such matters are communicated to the Company Secretary in advance so that the same can be included in the Agenda for the Board/Committee Meetings.
iv. In addition to items which are mandated to be placed before the Board for its noting and/or approval, information is provided on various significant issues.
v. The Board is given presentations covering Global Steel Scenario, Global/Indian Economy, Company's Financials, Sales, Production, Business Strategy, Subsidiary's performance, Competitor's Performance and Risk Management practices before taking on record the Quarterly/ Half Yearly/ Nine Monthly/ Annual financial results of the Company.
The Board is also provided with Audit Committee observations on the Internal audit findings and 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.
C. DISTRIBUTION OF BOARD AGENDA MATERIAL:
Agenda and Notes on Agenda are circulated to the Directors, in advance, in the defined Agenda format. All material information is incorporated in the Agenda papers for facilitating meaningful and focused discussions at the meeting. Where it is not practical to attach any document to the Agenda, the same is tabled before the meeting with specific reference to this effect in the Agenda. In special and exceptional circumstances, additional or supplementary item(s) on the Agenda are considered.
D. RECORDING MINUTES OF PROCEEDINGS AT BOARD AND COMMITTEE MEETINGS:
The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. Draft minutes are circulated to all the members of the Board/Committee for their comments. The final minutes are entered in the Minutes Book within 30 days from conclusion of the meeting and are signed by the Chairman of the meeting/ Chairman of the next meeting. A copy of the signed Minutes certified by the Company Secretary are circulated to all members within fifteen days after those are signed.
E. POST-MEETING FOLLOW-UP MECHANISM:
The Company has an effective post meeting follow-up, review and reporting process mechanism for the decisions taken by the Board/Committees. The important decisions taken at the Board/Committee meetings are communicated to the concerned functional Heads promptly. Action Taken Report on decisions of the previous meeting(s) is placed at the immediately succeeding meeting of the Board/Committee for noting by the Board/Committee members.
While preparing the Agenda, Notes on Agenda, Minutes etc. of the meeting(s), adequate care is taken to ensureadherence to all applicable laws and regulations including the Companies Act, 2013, read with the Rules made there under.
2.5 STRATEGY MEET:
A strategy meet of the Board of Directors is generally held at appropriate intervals to formulate, evaluate and approve the business strategy of the Company. The Functional Heads give a brief presentation to the Board covering their respective areas of responsibility. The meeting focuses on strategic goals, financial management policies, management assurances and control aspects and the growth plan of the Company.
2.6 TERMS AND CONDITIONS OF APPOINTMENT OF INDEPENDENT DIRECTORS:
The terms and conditions of appointment of Independent Directors were set out in the appointment letter issued to the Director at the time of his/her appointment/re-appointment as an Independent Non-Executive Director of the Company. The terms and conditions as mentioned in the appointment letter is disclosed on the company's website, <http://www.jsw.in/investors/investor-relations->steel.
2.7 MEETINGS OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company meet every quarter before the Board Meeting without the presence of Executive Directors or management personnel. These meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to the affairs of the Company and put forth their views to the Chairman and Managing Director.
During the year under review, the Independent Directors met on 29th March 2016, 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.
2.8 FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS:
The Company believes that the Board be continuously empowered with the knowledge of the latest developments in the Company's business and the external environment affecting the industry as a whole. To this end, the Directors were given presentations on the global business environment, as well as all business areas of the Company including business strategy, risks opportunities. Monthly updates on performance/developments giving highlights of performance of the Company during each month including the developments/events having impact on the business of the Company are also sent to all the Directors. The details of familiarization programmes imparted to Independent Directors is disclosed on the company's website, <http://www.jsw.in/investors/investor-relations->steel.
2.9 PERFORMANCE EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10), 19(4) and Part D of Schedule II of the SEBI (LODR Regulations), a Board Evaluation Policy has been framed and approved by the Nomination and Remuneration Committee (NRC) and by the Board.
The Board carried out an annual performance evaluation of its own performance ,the Independent Directors individually as well as the evaluation of the working of the Committees of the Board. The performance evaluation of all the Directors was carried out by the Nominationand Remuneration Committee. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors.
The purpose of the Board evaluation is to achieve persistent and consistent improvement in the governance of the Company at the Board level with the participation of all concerned in an environment of harmony. The Board acknowledges its intention to establish and follow "best practices" in Board governance in order to fulfil its fiduciary obligation to the Company. The Board believes the evaluation will lead to a closer working relationship among Board members, greater efficiency in the use of the Board's time, and increased effectiveness of the Board as a governing body.
A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and 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 parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.
The Directors expressed their satisfaction with the evaluation process.
The Audit Committee comprises of three Non-Executive Directors, all of whom are Independent Directors. Mr. Uday M. Chitale is the Chairman of the Audit Committee. The Members possess adequate knowledge of Accounts, Audit, Finance, etc. The composition of the Audit Committee meets the requirements as per the Section 177 of the Companies Act, 2013 and Regulation 18(1) of the SEBI (LODR Regulations).
The Broad terms of reference of Audit Committee are:
a) Overseeing the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
b) Reviewing with the management the financial statements and auditor's report thereon before submission to the Board, focusing primarily on:
(1) Matters to be included in the Directors Responsibility Statement to be included in the Board's report in terms of Clause (c) of subsection 3 of Section 134 of the Companies Act, 2013.
(2) Changes to any accounting policies and practices.
(3) Major accounting entries based on the exercise of judgement by Management
(4) Significant adjustments if any, arising out of audit findings.
(5) Compliance with respect to accounting standards, listing agreements and legal requirements concerning financial statements.
(6) Disclosure of any related party transactions.
(7) Modified opinion (s) in the draft audit report.
c) Re-commending to the Board, the appointment, re-appointment, remuneration and terms of appointment of statutory auditors, cost auditors of the Company.
d) To review reports of the Management Auditors and Internal Auditors and discussion on any significant findings and follow up there on.
e) Reviewing with the management, external and internal auditors, the adequacy of internal control systems, and the Company's statement on the same prior to endorsement by the Board.
f) Evaluation of the internal financial controls and risk management systems.
g) To review the adequacy of internal audit function, 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.
h) To approve transactions of the Company with related parties and subsequent modifications of the transactions with related parties.
i) In addition, the powers and role of the Audit Committee are as laid down under Regulation 18(3) and Part C of Schedule II of the SEBI (LODR Regulations) and Section 177 of the Companies Act, 2013.
8 meetings of the Audit Committee were held during the financial year 2015-16, as against the minimum requirement of four meetings. The Committee meetings were held on 14.05.2015, 25.06.2015, 28.07.2015, 06.10.2015, 20.10.2015, 7.12.2015, 28.01.2016 and 29.03.2016.
The Jt. Managing Director & Group CFO, Dy. Managing Director, Director (Commercial & Marketing), Chief Financial Officer, Accounts Heads of each Unit, Sr. Vice President (Internal Audit), Financial Controller, the Company Secretary and the representatives of the Statutory Auditors attend the Audit Committee meetings. The representatives of Management Auditors attend the Audit Committee Meeting whenever matters relating to management audit are considered. The representatives of the Cost Auditor attend the Audit Committee meeting when the Cost Audit Report is tabled for discussion. The Company Secretary is the Secretary of the Audit Committee.
Mr. Uday M. Chitale, Chairman of the Audit Committee was present at the last Annual General Meeting held on 28.07.2015.
NOMINATION & REMUNERATION COMMITTEE:
The Nomination & Remuneration Committee's constitution and terms of reference are in compliance with the provisions of the Companies Act, 2013 and Regulation 19 and Part D of the Schedule II of the SEBI (LODR Regulations).
The terms of reference of the Committee inter alia, include the following:
• Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and carry out evaluation of every director's performance.
• Formulating criteria for determining qualifications, positive attributes and independence of a director and recommending to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees.
• Formulating criteria for evaluation of Independent Directors and the Board.
• Devising a policy on Board diversity.
• Whether to extend or continue the term of appointment of independent director on the basis of the report of performance evaluation of independent directors.
Two meetings of Nomination and Remuneration Committee were held on 14.05.2015 and 29.07.2015.
4.1 PERFORMANCE EVALUATION CRITERIA FOR INDEPENDENT DIRECTORS:
Board Evaluation Policy has been framed by the Nomination and Remuneration Committee (NRC) and approved by the Board in its meeting held on 30.01.2015 and subsequently amended by the Board in its meeting held on 29.01.2016. This policy has been framed in compliance with the provisions of Section 178 (2), 134(3)(p) and other applicable provisions, if any, of the Companies Act, 2013 and Regulation 17(10), 19(4) and
Part D of Schedule II of the SEBI (LODR Regulations), as amended from time to time,
The Company adopted the following criteria to carry out the evaluation of Independent Directors, which is in terms of the provisions of the Companies Act, 2013 and the SEBI (LODR Regulations):
• The Nomination and Remuneration Committee (NRC) shall carry out evaluation of every Director's Performance.
• In addition, performance evaluation of the Independent Directors shall be done by the entire Board, excluding the director being evaluated. This is to be done on an annual basis for determining whether to extend or continue the term of appointment of the independent director.
The Evaluation process of Independent Directors and the Board will consist of two parts:
- Board Member Self Evaluation; and
- Overall Board and Committee Evaluation.
In the Board Member Self Evaluation, each Board member is encouraged to be introspective about his/her personal contribution/ performance/ conduct as director with reference to a questionnaire provided to them. Copies of the evaluation forms as applicable will be distributed to each Board Member. Board members shall complete the forms and return them to the Company Secretary or Board nominee or the consultant, as may be informed.
The Company Secretary or Board nominee or the consultant will tabulate the Forms. The Tabulated Report would be sent to all Board Members for evaluation and if any director disagrees with the self-evaluated results, he/ she will suitably intimate the Chairman of the Board, else the same will be deemed to have been accepted.
The individually completed forms will be preserved by the Company Secretary and the Tabulated Report would be presented to the Board and NRC for evaluation.
Apart from the above, the NRC will carry out an evaluation of every director's performance. For this purpose, the NRC would review the Tabulated Report. The NRC would provide feedback to the Board on its evaluation of every director's performance and based on such feedback, the Board will recommend appointments, re-appointments and removal of the non-performing Directors of the Company.
4.2 REMUNERATION POLICY AND DETAILS OF REMUNERATION PAID TO DIRECTORS:
In determining the remuneration of the Directors, Key Managerial Personnel (KMP) and other employees of the Company, a Remuneration Policy has been framed by the Nomination & Remuneration Committee and approved by the Board with the following broad objectives:
i. Ensuring that 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.
ii. Motivate KMP and Senior Management to achieve excellence in their performance.
iii. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
iv. Ensuring that the remuneration to Directors, KMP and Senior Management involves a balance between fixed & incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
The full text of the remuneration policy is available at <http://www.jsw.in/investors/investor-relations-steel>.
The Executive Directors (EDs) compensation is based on the appraisal system wherein their individual goals are linked to the organisational goals. EDs are paid compensation as per the agreements entered into between them and the Company, subject to the approval of the Board and of the members in General Meeting and such other approvals, as may be necessary.
The present remuneration structure of EDs comprises of salary, perquisites, allowances, performance linked incentive, ESOPs and contribution to PF and Gratuity.
The Non-Executive Directors are paid remuneration by way of commission and sitting fees. The commission payable to the Non-Executive Directors is based on the number of meetings of the Board attended by them, their Chairmanship / Membership of Audit Committee during the year subject to an overall ceiling of 1% of the net profits approved by the Members. The Company pays sitting fees at the rate of Rs. 20,000/-for each meeting of the Board and sub-committees attended by them.
The details of remuneration paid/payable to the Non-Executive Directors for the period April 1, 2015 to March 31, 2016 are as follows:
5. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholders Relationship Committee comprises of 3 Non-Executive Directors, all of whom are Independent Directors.
The Stakeholders Relationship Committee's constitution and terms of reference are in compliance with provisions of the Companies Act, 2013 and Regulation 20 and Part D of Schedule VI of the SEBI (LODR Regulations).
The terms of reference of the Committee are as follows:
1) To review the reports submitted by the Registrars and Share Transfer Agents of the Company at Half yearly intervals.
2) To periodically interact with the Registrars and Share Transfer Agents to ascertain and look into the quality of the Company's Shareholders / Investors grievance redressal system and to review the report on the functioning of the Investor grievances redressal system.
3) To follow-up on the implementation of suggestions for improvement, if any.
4) To periodically report to the Board about serious concerns if any.
5) To consider and resolve the grievances of the security holders of the company.
Mr. Lancy Varghese, the Company Secretary is the Compliance Officer for complying with the requirements of SEBI Regulations and the Listing Agreement with the Stock Exchanges in India. His address and contact details are as given below:
Address : JSW Centre, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 Phone : 022-42861000 Fax : 022-42863000 Email : firstname.lastname@example.org
INVESTOR GRIEVANCE REDRESSAL
Number of complaints received and resolved to the satisfaction of Shareholders / Investors during the year under review and their break-up is as under: have been processed on time and there are no transfers pending for more than 15 days.
Note: Complaints pertaining to the years subsequent to 2006-07 include investor complaints received from shareholders of Southern Iron & Steel Co. Limited and JSW Ispat Steel Limited upon its merger with the Company in the financial years 2007-2008 and 2013-14 respectively.
6. RISK MANAGEMENT COMMITTEE:
The Risk Management Committee's constitution and terms of reference are in compliance with provisions of the Companies Act, 2013 and Regulation 21 of the SEBI (LODR Regulations).
The terms of reference of the Committee are as follows:
1. To periodically review risk assessment and minimisation procedures to ensure that Executive Management controls risk through means of a properly defined framework.
i. There were no materially significant related party transactions i.e. transactions of the Company of material nature with its Promoters, Directors or the Management, their relatives or Subsidiaries etc. which could conflict with the interests of the Company.
ii. No penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets during the last three years.
iii. The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures, which are periodically reviewed.
iv. Whistle Blower Policy/Vigil Mechanism: The Whistle Blower Policy/Vigil Mechanism has been formulated by the Company with a view to provide a mechanism for directors and employees of the Company to approach the Ethics Counsellor / Chairman of the Audit Committee of the Board to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct or ethics policy or any other unethical or improper activity including misuse or improper use of accounting policies and procedures resulting in misrepresentation of accounts and financial statements. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment.
The Whistle Blower Policy/Vigil Mechanism also provides safeguards against victimization or unfair treatment of the employees who avail of the mechanism and no personnel has been denied access to the Audit Committee.
The Whistle Blower Policy/Vigil Mechanism adopted by the Company in line with Section 177 of the Companies Act, 2013 and Regulation 22 of the Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015, which is a mandatory requirement, has been posted on the Company's website <http://www.jsw.in/> investors/investor-relations-steel.
v. Subsidiary Monitoring Framework: All the Subsidiary Companies of the Company are Board managed with their Boards having the rights and obligations to manage such companies in the best interest of their stakeholders. As a majority shareholder, the Company nominates its representatives on the Boards of subsidiary companies and monitors the performance of such companies, inter alia, by the following means:
a) The financial statements alongwith the investments made by the unlisted subsidiaries are placed before the Audit Committee and the Company's Board, quarterly.
b) A copy of the Minutes of the Meetings of the Board of Directors of the Company's subsidiaries along with Exception Reports and quarterly Compliance Certificates issued by CEO/CFO/CS are tabled before the Company's Board, quarterly.
c) A summary of the Minutes of the Meetings of the Board of Directors of the Company's subsidiaries are circulated to the Company's Board, quarterly.
d) A statement containing all significant transactions and arrangements entered into by the subsidiary companies is placed before the Company's Board.
The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding accounting year or has generated 20% of the consolidated income of the Company during the previous financial year. However, a policy for determination of Material Subsidiaries has been formulated and has been posted on the company's website <http://www>. jsw.in/investors/investor-relations-steel.
vi. Related Party Transactions: All transactions entered into with Related Parties as defined under the Companies Act, 2013, erstwhile Clause 49 of the Listing Agreement and Regulation 23 of the SEBI (LODR Regulations) during the financial year were in the ordinary course of business and on arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS 18) has been made in the notes to the Financial Statements.
The Board approved policy for related party transactions is available on the Company's website <http://www.jsw.in/investors/investor-relations->steel.
vii. Internal Controls: The Company has a formal system of internal control testing which examines both the design effectiveness and operational effectiveness to ensure reliability of financial and operational information and all statutory/regulatory compliances. The Company's business processes are on SAP-ERP platforms and has a strong monitoring and reporting process resulting in financial discipline and accountability.
viii. Compliance with Accounting Standards: In the preparation of the financial statements, the Company has followed the Accounting Standards notified pursuant to Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provision of the Companies Act 2013. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.
10. MEANS OF COMMUNICATION:
Timely disclosure of consistent, comparable, relevant and reliable information on corporate financial performance is at the core of good governance. Towards this end:
a) Quarterly/Half Yearly/ Nine Monthly/ Annual Results: The Quarterly, Half Yearly, Nine Monthly and
Annual Results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board.
B) PUBLICATION OF QUARTERLY/ HALF YEARLY/NINE MONTHLY/ ANNUAL RESULTS:
The Quarterly, Half Yearly, Nine Monthly and Annual Results of the Company are published in the prescribed proforma within 48 hours of the conclusion of the meeting of the Board in which they are considered, at least in one English newspaper circulating in the whole or substantially the whole of India and in one Vernacular newspaper of the State of Maharashtra where the Registered Office of the Company is situated.
C) MONTHLY PRODUCTION FIGURES AND OTHER PRESS RELEASES: To provide information to Investors, monthly production figures and other press releases are sent to the Stock Exchanges as well as displayed on the Company's website before it is released to the media.
D) WEBSITE: The Company's website www.jsw.in contains a separate dedicated section "Investors" where information for shareholders is available. The Quarterly/Annual Financial Results, annual reports, analysts presentations, investor forms, stock exchange information, shareholding pattern, corporate benefits, polices, investors' contact details, etc., are posted on the website in addition to the information stipulated under Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The latest official press releases are also available on the website.
E) PRESENTATIONS TO ANALYSTS: Four presentations were made to analysts/investors during the F.Y. 2015-16 on 15.05.2015, 29.07.2015, 21.10.2015 and 29.01.2016. The same are availableon the Company's website. The Presentations broadly covered operational and financial performance of the Company and industry outlook.
F) FILING WITH BSE "LISTING CENTRE":
Pursuant to Regulation 10 (1) of the SEBI (LODR Regulations), BSE has mandated the Listing Centre as the "Electronic Platform" for filing all mandatory filings and any other information to be filed with the Stock Exchanges by Listed Entities. All the data relating to financial results, shareholding pattern, Corporate Governance Report, various submissions/ disclosure documents etc., have been electronically filed with the Exchange on the "Listing Centre" (<http://listing.bseindia.com>).
G) NSE ELECTRONIC APPLICATION PROCESSING SYSTEM (NEAPS):
NEAPS is a web based application designed by NSE for corporates. The Financial Results, Shareholding pattern and Corporate Governance Report, various submissions/disclosure documents etc. are also filed electronically on NEAPS.
H) ANNUAL REPORT:
Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors' Report along with relevant annexures, Business Responsibility/Sustainability Report, Auditor's Report and other important information is circulated to members and others entitled thereto. The Management Discussion and Analysis (MD&A) Report forms part of the Annual Report.
I) CHAIRMAN'S COMMUNIQUE: Printed copy of the Chairman's Speech is distributed to all the shareholders at the Annual General Meetings. The same is also placed on the website of the Company.
J) REMINDER TO INVESTORS:
Reminders for unpaid dividend/unpaid interest on debentures are sent to the Shareholders/Debenture holders as per records at appropriate intervals.
11. GENERAL SHAREHOLDERS INFORMATION:
I. ANNUAL GENERAL MEETING:
DATE AND TIME : July 26, 2016 at 11.00 a.m.
VENUE : Y B Chavan Auditorium,General Jagannathrao Bhonsle Marg, Nariman Point, Mumbai 400 021, Maharashtra.
DATES OF BOOK CLOSURE : July 6, 2016 to July 8, 2016 (bothdays inclusive)
DIVIDENDPAYMENT DATE: : July 29, 2016
II. FINANCIAL CALENDAR 2016-17:
First quarterly results : July, 2016
Second quarterly results : October, 2016
Third quarterly results : January, 2017
Annual results for the year : April/May, 2017 ending on 31.03.2017
Annual General Meeting for : June/July, 2017 the Year 2017
Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules 2014 and Regulation 44 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, members have been provided the facility to exercise their right to vote at General Meetings by electronic means, through e-Voting Services provided by Karvy Computershare Private Limited.
IV. CORPORATE IDENTITY NUMBER (CIN):
The CIN of the Company allotted by the Ministry of Corporate Affairs, Government of India is L27102MH1994PLC152925.
V. LISTING ON STOCK EXCHANGES:
The Company's Equity Shares, 10% Cumulative Redeemable Preference Shares & 0.01% Cumulative Redeemable Preference Shares are listed on the following Stock Exchanges in India.
BSE LIMITED (BSE)
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001
NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE)
Exchange Plaza, Bandra-Kurla Complex, Bandra East, Mumbai - 400 051
The following Secured Redeemable Non-Convertible Debentures of the Company are listed on the BSE
XI. REGISTRAR & SHARE TRANSFER AGENTS:
Karvy Computershare Private Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District Nanakramguda, Hyderabad - 500 032 Tel. No. 040 67161500 Fax. No. 040 23001153 E-mail: email@example.com Website: www.karvycomputershare.com
XII. SHARE TRANSFER/TRANSMISSION SYSTEM:
Requests for Transfer/Transmission of Shares held in physical form can be lodged with Karvy Computershare Private Limited at the above mentioned address. The requests are normally processed within 15 days of receipt of the documents, if documents are found in order. Shares under objection are returned within two weeks.
SEBI has vide its circular dated 7 January, 2010 made it mandatory to furnish a copy of PAN Card in the following cases for transmission of shares in physical form:
a) Deletion of name of the deceased shareholder(s), where the shares are held in the name of two or more shareholders.
b) Transmission of shares to the legal heir(s), where deceased shareholder was the sole holder.
c) Transposition of shares in case of change in the order of names in which physical shares are held jointly in the names of two or more shareholders.
The Board has delegated the authority for approving transfers, transmissions etc. of the Company's securities to the Share/Debenture Transfer Committee. The decisions of Share/Debenture Transfer Committee are placed at the next Board Meeting. The Company obtains from a Company Secretary in Practice, a half yearly certificate of compliance with the share transfer formalities as required under the erstwhile Clause 47(c) of the Listing Agreement and Regulation 40(9) of the SEBI (LODR Regulations) and files a copy of the certificate with the Stock Exchanges.
B) UNCLAIMED DIVIDENDS:
Under the Companies Act, 1956, dividends that are unclaimed for a period of seven years, are to be transferred statutorily to the Investor Education and Protection Fund (IEPF) administered by the Central Government and thereafter cannot be claimed by the investors. To ensure maximum disbursement ofunclaimed dividend, the Company sends reminders to the concerned investors at appropriate intervals.
The unpaid/unclaimed dividends upto the financial year ended 31.03.1995 has been transferred to the General Revenue Account of the Central Government. Members, who have not claimed their dividend for the said period till date, may claim the amount from the Registrar of Companies, Maharashtra Mumbai. Apart from the above, the Company has transferred the unpaid dividends for the FY 2007-08 to the IEPF.
The Members of the Company who have not yet encashed their dividend warrant(s) for the FY 200809 and thereafter, may write to the Company's R&T Agent immediately.
C) UNCLAIMED SHARES:
As per Clause 5A(II) of the erstwhile Listing Agreement, the Company after sending three reminders on 23 June, 2011, 25 August, 2011 and 31 October, 2011 to the registered address of the shareholders of the Company and on 23.01.2014, 21.03.2014 and 02.05.2014 to the registered address of the shareholders of the erstwhile JSW Ispat Steel Limited who became shareholders of the Company consequent to the merger, requesting for correct particulars to dispatch the undelivered share certificates, for shares issued in physical form which remained unclaimed, transferred 707,359 shares to a dedicated demat account styled as "Unclaimed Suspense Account" opened with Stock Holding Corporation of India.
Any corporate benefits in terms of securities accruing on aforesaid shares viz. bonus shares, split, etc., shall be credited to the "Unclaimed Suspense Account" duly opened with Stock Holding Corporation of India Limited and dividend to the "Unclaimed Suspense Account" opened with Vijaya Bank.
As and when the rightful owner of such shares approaches the Company at later date, the Company shall credit the shares lying in the "Unclaimed Suspense Account" to the rightful owner to the extent of his/her entitlement after proper verification of the identity of the rightful owner.
D) DEMATERIALISATION OF SHARES AND LIQUIDITY:
The Company has arrangements with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for demat facility. 237,583,017 Equity Shares aggregating to 98.29% of the total Equity Capital is held in dematerialised form as on 31.03.2016 of which 93.88% (226,926,100 Equity Shares) of total equity capital is held in NSDL & 4.41% (10,656,917 Equity Shares) of total equity capital is held in CDSL as on 31.3.2016.
PHYSICAL SHARE PURCHASE SCHEME:
Having regard to the difficulties experienced by the shareholders in disposing of their shares held in physical form and to mitigate the hardship caused to them, the Company has, along with Karvy Computershare Private Limited (Karvy), formulated a Physical Share Purchase Scheme in 2005-06.
The Equity Shares in physical mode tendered by the shareholders under the scheme are sold by Karvy at the prevailing market price and the net sale proceeds thereof are distributed to the concerned shareholders. The shareholders who wish to avail benefit of the scheme may kindly contact Karvy.
F) NATIONAL ELECTRONIC CLEARING SERVICE (NECS):
As per the directive from Securities and Exchange Board of India dated 21 March 2013, companies whose securities are listed on the Stock Exchanges shall use any Reserve Bank of India (RBI) approved electronic mode of payment such as ECS [LECS(Local ECS) / RECS (Regional ECS)/NECS (National ECS)]/ NEFT etc., for making cash payments to investors.
The Company will remit the dividend payment through National Electronic Clearing Service (NECS) to the shareholders having accounts with Branches of Banks covered under CBS (Core Banking Solution).
Equity Shareholders holding shares in physical form, who wish to avail the NECS facility, may send their NECS mandate in the format attached to the Company's R & T Agents, in the event they have not done so earlier. Equity Shareholders holding shares in electronic mode may furnish their new Bank Account Number allotted to them by their bank after implementation of CBS, alongwith a photocopy of a cheque pertaining to the concerned account, or the NECS mandate to their Depositary Participant (DP), at the earliest.
G) GREEN INITIATIVE FOR PAPERLESS COMMUNICATIONS:
The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in Corporate Governance" by allowing service of documents by a Company to its Members through electronic mode. The move of the ministry allows public at large to contribute to the green movement.
Keeping in view the underlying theme, the Company will continue to send various communications and documents like notice calling general meetings, audited financial statements, directors' report, auditor's report etc., in electronic form, to the email address provided by the Members to the Depositories or to the Company.
This is also a golden opportunity for every shareholder of JSW Steel Limited to contribute to this Corporate Social Responsibility initiative of the Company. To support this green initiative in full measure, members who have not registered their e-mail addresses so far, are requested to register their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participant. Members who hold shares in physical form are requested to fill in the Registration form which can be obtained from Company's Registrar Karvy Computershare Private Limited or downloaded from the Company's website www.jsw.in <http://www.jsw.in> under the section "Investors", and register the same with the Company's Registrar.
H) NOMINATION FACILITY:
Pursuant to the provisions of the Companies Act, 2013, members are entitled to make nominations in respect of shares held by them. Members holding shares in physical form and intending to make/ change the nomination in respect of their shares in the Company may submit their requests in Form No. 2B to the Company's Registrar, Karvy Computershare Private Limited. Members holding shares in electronic form may submit their nomination requests to their respective Depository Participants directly. Form No. 2B can be obtained from Company's Registrar, Karvy Computershare Private Limited or downloaded from the Company's website www. jsw.in under the section 'Investors'.
I) OUTSTANDING GDRS/ADRS OR WARRANTS OR ANY CONVERTIBLE INSTRUMENT, CONVERSION DATES AND LIKELY IMPACT ON EQUITY:
There are no outstanding GDRs/ADRs or Warrants or any Convertible Instrument as on 31.3.2016.
J) COMMODITY PRICE RISK OR FOREIGN EXCHANGE RISK AND HEDGING ACTIVITIES:
A comprehensive financial and commodity risk management program supports the achievement of an organisation's objectives by enabling the identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks and implementing policies and procedures to manage and monitor the risks.
The Company has in place a Board approved policy which establishes the financial and commodity risk management framework and defines the procedures and controls for the effective management of the Company's risks that arise due to imports of raw material, capex, debt servicing and exports of finished steel.
Currency Hedging and Commodity Hedging is as guided by Risk management policy approved by Board and the same is reviewed by Board committee of independent directors each quarter.
K) REGISTERED OFFICE:
JSW Centre, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051.
L) PLANT LOCATIONS:
Vijayanagar : P.O. Vidyanagar, Toranagallu Village, Sandur Taluk, Dist. Bellary, Karnataka - 583 275
Dolvi : Dolvi Works, Geetapuram, Dolvi Village, Pen Taluk, Dist. Raigad, Maharashtra - 402 107
Salem: Pottaneri, M Kalipatti Village, Mecheri Post, Mettur Taluk, Salem Dist., Tamil Nadu - 636 453.
M) ADDRESS FOR INVESTOR CORRESPONDENCE:
1. RETAIL INVESTORS
a) For Securities held in Physical form Karvy Computershare Private Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 008 Tel. No. 040 - 33211500 Fax. No. 040 - 23001153 E-mail: firstname.lastname@example.org Website: www.karvy.com
b) For Securities held in Demat form
The investor's Depository Participant and/ or Karvy Computershare Private Limited
c) JSW Steel Limited - Investor Relation Center
JSW Centre, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051 Phone No. 022 - 42861000 Fax No. 022 - 42863000
2. INSTITUTIONAL INVESTORS:
Mr. Pritesh Vinay, Vice President (Capital Markets and Investor Relations), JSW Centre, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051 Tel. No. 022- 42861000 Fax No. 022 - 42863000
3. DESIGNATED EXCLUSIVE EMAIL-ID FOR INVESTOR
4. TOLL FREE NUMBER OF R & T AGENT'S EXCLUSIVE CALL CENTRE: 1-800-3454001
5. WEB-BASED QUERY REDRESSAL SYSTEM
Web-based Query Redressal System has been extended by the Registrars and Share Transfer Agent for redressal of Shareholders' queries. The Shareholder can visit <http://karisma.karvy.com> and click on "investors" option for query registration after free identity registration.
After logging in, Shareholders can submit their query in the "QUERIES" option provided on the website, which would give the grievance registration number. For accessing the status/response to their query, the same number can be used at the option "VIEW REPLY" after 24 hours. The Shareholders can continue to put additional queries relating to the case till they are satisfied.
11. NON-COMPLIANCE OF ANY REQUIREMENT OF
There are no instances of non-compliance of Corporate Governance Report as mentioned in sub-paras (2) to (10) of Para (C) of Schedule V.
12. ADOPTION OF DISCRETIONARY REQUIREMENTS:
The status of adoption of discretionary requirements of Regulation 27(1) as specified under Part E of Schedule II of the SEBI (LODR Regulations) is provided below:
i. Non-Executive Chairperson's entitlement to maintain Chairman's Office and reimbursement of expenses incurred: Not applicable as the Company does not have a Non-Executive Chairperson.
ii. Shareholders' Rights: As the quarterly and half yearly financial performance including summary of significant events are published in the newspapers, communicated to the stock exchanges and also posted on the Company's website, the half yearly declaration of financial performance including summary of the significant events in the last six months, are not being sent separately to each household of Shareholders.
iii. Modified Opinion in Auditors Report: The Company's financial statement for the financial year 2015-16 does not contain any modified audit opinion.
iv. Separate posts of Chairman and Managing Director or CEO: The Chairman's Office is not separate from that of the Managing Director.
v. Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee.
13. CORPORATE ETHICS:
The Company adheres to the highest standards of business ethics, compliance with statutory and legal requirements and commitment to transparency in business dealings. A Code of Conduct for Board Members and Senior Management and JSWSL Code of Conduct to Regulate, Monitor and Report Trading by Insiders (formerly known as Code of Conduct for Prevention of Insider Trading) as detailed below has been adopted pursuant to Clause 49 (E) of the erstwhile Listing Agreement & the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, respectively:
A) CODE OF CONDUCT FOR BOARD MEMBERS
AND SENIOR MANAGEMENT:
The Board of Directors of the Company adopted a revised Code of Conduct for Board Members and Senior Management at their meeting held on 21.10.2014. The Code highlights Corporate Governance as the cornerstone for sustained management performance, for serving all the stakeholders and for instilling pride of association. The above Code supersedes the earlier Code of Conduct for Board Members and Senior Management approved by the Board in its meetings held on 28.1.2014, 24.10.2008 and 20.10.2005.
The Code is applicable to all Board of Directors and specified Senior Management Executives. The Code impresses upon Directors and Senior Management Executives to uphold the interest of the Company and its stakeholders and to endeavour to fulfil all the fiduciary obligations towards them. Another important principle on which the code is based is that the Directors and Senior Management Executives shall act in accordance with the highest standards of honesty, integrity, fairness and ethical conduct and shall exercise utmost good faith, due care and integrity in performing their duties. The Code has been posted on the website of the Company www.jsw <http://www.jsw>. in.
DECLARATION AFFIRMING COMPLIANCE OF CODE OF CONDUCT
The Company has received confirmations from all the Board of Directors as well as Senior Management Executives regarding compliance of the Code of Conduct during the year under review.
A declaration by the Jt. Managing Director and Group CFO affirming compliance of Board Members and Senior Management Personnel to the Code is also annexed herewith.
B) JSWSL CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY INSIDERS:
The Company adopted a Code of Conduct for Prevention of Insider Trading for its Management, Staff and Directors on 29 October, 2002. The Code lays down guidelines and procedures to be followed and disclosures to be made by Directors, Top Level Executives and Staff whilst dealing in shares of the Company.
Minor modifications were made to the "JSWSL Code of Conduct for Prevention of Insider Trading" in line with the amendments made to the "Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2008, by SEBI. The amended code was adopted by the Board in its meeting held on 7.5.2009.
SEBI thereafter, to put in place a framework for prohibition of Insider Trading and to strengthen the legal framework, notified the "Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. In order to comply with the mandatory requirement of the Regulations, the Code of Conduct for prevention of Insider Trading was revised to bring it in line with the new 2015 Regulations. The new code "JSWSL Code of Conduct to Regulate, Monitor and Report Trading by Insiders" was adopted by the Board in its meeting held on 21.10.2015. This Code supersedes the earlier "JSWSL Code of Conduct for Prevention of Insider Trading".
The policy and the procedures are periodically communicated to the employees who are considered as insiders of the Company. Trading window closure is intimated to all employees and to the Stock Exchange in advance, whenever required.
The Company Secretary has been appointed as the Compliance Officer and is responsible for adherence to the Code.
C) RECONCILIATION OF SHARE CAPITAL AUDIT REPORT
Reconciliation of Share Capital Audit Report in terms of SEBI Circular No. CIR/MRD/DP/30/2010 dated 06.09.2010 and SEBI Directive no. D&CC/FITTC/CIR-16/2002 dated 31.12.2002, confirming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the total number of dematerialised shares held with National Securities Depository Limited and Central Depository Services (India) Limited, is placed before the Board on a quarterly basis and is also submitted to the Stock Exchanges where the shares of the Company are listed.
D) INTERNAL CHECKS AND BALANCES
Wide use of technology in the Company's financial reporting processes ensures robustness and integrity. The Company deploys a robust system of internal controls to allow optimal use and protection of assets, facilitate accurate and timely compilation of financial statements and management reports and ensure compliance with statutory laws, regulations and Company policies. The Company has both external and internal audit systems in place. Auditors have access to all records and information of the Company. The Board and the management periodically review the findings and recommendations of the auditors and take necessary corrective actions whenever necessary. The Board recognises the work of the auditors as an independent check on the information received from the management on the operations and performance of the Company.
E) LEGAL COMPLIANCE OF THE COMPANY'S
Periodical Management audit ensures that the Company's Subsidiaries conducts its business with high standards of legal, statutory and regulatory compliances. As per the report of the Management Auditors, there has been no material non-compliance with the applicable statutory requirements by the Company and its subsidiaries.
F) HUMAN RIGHTS POLICY
In line with JSW's heritage as a responsible corporate citizen and its commitment to respecting the economic, social, cultural, political and civil rights of individuals involved in and impacted by its operations, the Board of Directors in its meeting held on 20.1.2010 has approved a Formal Human Rights Policy for adoption by the Company and all its Subsidiaries as part of its global personnel policies, in line with the practice followed internationally by Companies of Repute. A few minor changes were made to the policy by the Board in its meeting held on 28.1.2013 to bring it in line with the requirements of Business responsibility reporting. JSW's policy on human rights applies to all its businesses processes and is part of its commitment to ethical and socially responsible behavior across its value chain.
JSW contributes to the fulfillment of human rights through compliance with local human rights legislation wherever it has operations, as well as through its policies, programs and grievance redressal mechanism. JSW upholds international human rights standards, does not condone human rights abuses and creates & nurtures a working environment where human rights are respected without prejudice.
COMPLIANCE CERTIFICATE BY AUDITORS:
The Company has obtained a certificate from the Statutory Auditors regarding compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement and Schedule V (E) of the SEBI (LODR Regulations) which is annexed herewith.