REPORT ON CORPORATE GOVERNANCE:
1] COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Corporate Governance refers to the structures and processes for direction and control of the companies. It is the process carried out by the Board of Directors and its related committees, on behalf of and for the benefit of the Company's stakeholders, to provide direction, authority and oversights to the management. It also provides the structure through which the objectives of the Company are set and the means of attaining those objectives and monitoring performances are determined.
KARMA Industries Limited (the Company) believes that good Corporate Governance practices ensures efficient conduct of the affairs of the Company and also helps in maximizing value for all its stakeholders. The Company has established systems and procedures to ensure that its Board of Directors is well informed and equipped to fulfill its overall responsibilities and to provide the management with strategic direction needed to create long-term shareholder value. The Company always endeavors to uphold the principles and practices of Corporate Governance to ensure transparency, integrity and accountability in its functioning, which are vital to achieve its vision of emerging as a low cost and efficient producer of value added steel products with captive coal, mineral resources and power.
In line with this, we are pleased to inform you that, as on 31 March 2012, the Company is in compliance with all the requirements of Clause 49 of the Listing Agreement. The necessary disclosures as required under Clause 49 of the Listing Agreement have been covered in this Annual Report.
2] BOARD OF DIRECTORS
As per the listing Agreement the Board should have an optimum combination of both Executive and Non Executive Directors, and at least one half of the Board has to comprise of independent Directors where the Chairman is Executive.
The Board of your Company as on March 31, 2012 has 2 Executive Director and 3 Non-Executive Directors. The number of independent Directors is 3.
During the financial year ended March 31, 2012, Board meetings Were held on 30.04.2011, 27.05.2011, 14.06.2011, 29.06.2011, 01.07.2011, 06.07.2011, 19.07.2011, 25.07.2011, 12.08.2011, 20.08.2011, 02.09.2011, 05.09.2011, 21.09.2011, 30.09.2011, 15.10.2011, 19.03.2012.
3] COMMITTEES OF DIRECTORS
Non Executive Directors provide guidance to operating management on policy matters as well as in monitoring the actions of operating management. This involvement provides regular exchange of information and ideas between the non-executive Directors and the operating management.
To conform to the requirement of clause 49 of the Listing Agreement with the Stock Exchange and Companies Act, 1956, the Board has constituted the required Committees.
3.1] AUDIT COMMITTEE
The Company has a qualified and independent Audit Committee comprising of 2 Non Executive Director. The broad terms of reference of the Audit Committee are inconsonance with the provisions of Clause 49 of the Listing Agreement.
The Committee held meetings during the year on 30.04.2011, 30.07.2011, 30.10.2011 and 31.01.2012.
Terms of reference:
All the members of Audit Committee are financial literate and have accounting and financial management knowledge.
The Committee invites Senior Management personnel and statutory auditors to attend these meetings.
The functions of the Audit Committee include the following:
1. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
2. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
3. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
4. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
5. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:
a. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (2AA) of section 217 of the Companies Act, 1956
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report.
6. Reviewing, with the management, the quarterly financial statements before submission to the board for approval.
7. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.
8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
9. Discussion with internal auditors any significant findings and follow up thereon.
10. Reviewing the findings of any internal investigations by the internal auditors in to matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.
11. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
12. To look in to the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.
13. To review the functioning of the Whistle Blower mechanism, in case the same is existing.
14. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Audit Committee has reviewed the following information:
1. Management Discussion & Analysis of financial condition and results of operations.
2. Statement of significant related party transactions (as defined by the audit committee), submitted by management
3. Internal Audit Reports relating to internal control weaknesses
Although Remuneration Committee has been constituted by the Company, all matters relating to review and approval compensation payable to the Executive and Non Executive Directors are considered by the Board within the overall limits approved by the Members.
The Managing Director is entitled to Salary, perquisites and allowances. Salary is paid within the range as approved by the Shareholders. The Committee approves all the revisions in salary, allowances and perquisites subject to the overall ceiling prescribed by Section 198, 309 and Schedule XIII of the Companies Act, 1956.
3.3] SHAREHOLDERS' GRIEVANCE COMMITTEE
The Company has constituted a Shareholders' Committee to specifically look into Investors' complaints, if any, and to redress the same expeditiously. The Committee redresses complaints of investors like transfer of shares, non-receipt of Balance Sheet and non-receipt of declared Dividend etc. The Shareholder's Grievance Committee met 1[Once] during the year ended March 31, 2012.
During the year, the Company did not enter into any materially significant related party transactions with its Promoters, Directors or the Management, their Subsidiaries or relatives etc., which may have a potential conflict with the interest of the Company at large.
Transaction with related parties as per the requirements of Accounting Standards 18 are disclosed in the Schedule to the Balance Sheet.
The company has complied with the requirements of the Stock Exchange, SEBI, and other Statutory Authorities on all matters relating to Capital Markets during the last three years. The Company has paid its listing fees for the 2012-13.
The Company has a Whistle Blower Policy. During the year, no unethical behavior has been reported. Further the Company has not denied any personnel access to the Audit Committee and it will provide protection to whistle blower, if any, from adverse personnel action.
5] CODE OF CONDUCT, CORPORATE ETHICS AND SOCIAL RESPONSIBILITY
i. Code Of Business Conduct And Ethics
Karma Industries Limited believes that Good Corporate Governance is the key to the Conduct of Company's Business in a transparent, reliable and vibrant manner. It is of paramount importance for any Company to create an atmosphere of faith, integrity, accountability, responsibility and financial stability by adhering to commitment, ethical business conduct, a high degree of transparency there by unlocking the individual intellectual capabilities and enabling its Board of Directors to conduct its duties under a moral authority, which ultimately leads to enhance legitimate needs and value of the stake holders.
ii. Code of Conduct for Prevention of Insider Trading
The Company has a comprehensive code of conduct for its management, staff and directors for prevention of insider trading. The code lays down the guidelines and procedures to be followed and disclosures to be made while dealing with the shares of the Company and cautioning them on the consequences of non -compliances. The pieces of the price sensitive information are disseminated to the stock exchanges timely, adequately and promptly on continuous basis for prevention of insider trading. The Company has a compliance officer and is responsible for adherence to Code for prevention of insider trading.
iii. Social Responsibility
Karma Industries Limited has also contributed to society especially the needy persons in our special ways. The Company has adopted safety, health, and environment (SHE) policy with a commitment to provide a safe and healthy working environment, preservation of the environment of the territory in which the organization operates, preventing the wasteful use of natural resources and minimize any hazardous impact of development, production, use and disposal of any of the organization products and services on ecological environment, maintained highest standard of environmental management and ensure for all its members, consultants , contractors and customers a safe and healthy environment, free from injury and disease.
6] MEANS OF COMMUNICATION
Quarterly results are published in prominent daily newspapers viz., Financial Express/ Economics Times/ Maharashtra Times. All items required to be covered in the Management Discussion and Analysis have been included in the Management Discussion and Analysis as attached to this Report.
The Company has its own website and all the vital information relating to the Company and its products are displayed on the website. Address of the website is www.karmaindustriesltd.com
The Company has published all its financial results on the website.
7] GENERAL SHAREHOLDERS INFORMATION
ANNUAL GENERAL MEETING: 35th Annual General Meeting
DAY & DATE: Friday, 28th September, 2012
VENUE: H-131, Raj Arcade, Opp. Kama Vihar Sports Club, Mahavir Nagar, Kandivali West, Mumbai-400 067.
8] FINANCIAL CALENDAR
Reporting for Un-audited Financial Results for the quarter ending are as under: (Tentative and subject to change)
June 30, 2012: Last Week of July, 2012
September 30, 2012: Last Week of October, 2012
December 31, 2012: Last Week of January, 2013
March 31, 2013: Last Week of April / May, 2013
Annual General Meeting for the year 2012-13: Month of August/ September, 2013
9] DATE OF BOOK CLOSURE:
21st September, 2012 to 28th September, 2012 [Both days inclusive] Dividend payment date- not applicable
10] SHARE TRANSFER SYSTEM
The turn around time for completion of transfer of shares in physical mode is generally 15 days, if the documents are clear in all respects. The Board has delegated the responsibility of Share Transfers to Share Transfer Committee & Registrar & transfer agent under Demat modes are transferred by the Registrar for this purpose within 15 days.
11] TRANSFER UNDER PHYSICAL AND DEMAT MODE
M/S.SYSTEM SUPPORT SERVICES
[Unit: Karma Industries Limited]
209, Shivai Industrial Estate, 89, Andheri Kurla Road, Sakinaka, Andheri [East], Mumbai-400 072
Telephone No.022-2850 0835
12] COMPLIANCE OFFICER
Mr. Krishnat Desai
H-Wing, Office No.131, Raj Arcade, Mahavir Nagar, Kandivali, West, Mumbai-400 067.
Telephone No.022-4268 7020
13] ADDRESS FOR CORRESPONDENCE
KARMA INDUSTRIES LIMITED
H Wing, Office No.131,Raj Arcade, Mahavir Nagar, Kandivali West, Mumbai-400 067.
TelephoneNo.022-4268 7000 / 20
The Bombay Stock Exchange
The Ahmedabad Stock Exchange
The Hyderabad Stock Exchange
15] STOCK CODE OF THE COMPANY
The Bombay Stock Exchange Ltd.
Script Name: KARMAINDUSTRIES LIMITED
Script Code: 512585
Electronic Mode: INE416F01019.
16] DEPOSITORY CONNECTIVITY:
NSDL & CDSL.
17] ISIN NO. FOR THE COMPANY'S SECURITY:
18] DEMATERIALISATION OF SHARES
As on March 31, 2012, 1,53,90,571 Shares representing 46.64% of CDSL and 1,69,27,819 Shares representing 51.30% of NSDL. Members can hold shares in electronic forms and trade the same in Depository System. However, they may hold the same in physical form also.
A certificate has been obtained from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance and is attached to this report.
For and behalf of the Board of Directors
For Karma Industries Limited
KARMA INDUSTRIES LIMITED
H Wing, Office No. 131, Raj Arcade, Mahavir Nagar, Kandivali West, Mumbai – 400 067
Date: 31st May, 2012