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KIC Metaliks Ltd.

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KIC Metaliks Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE

The Company's philosophy is to conduct business with ethical standards, transparent governance practices and highest standards of professionalism, fairness and integrity for the growth and prosperity of all the stakeholders on a sustainable basis in keeping with its corporate social responsibilities. The Company believes that organizations have both economic and social objectives and the principles of Corporate Governance are applied to achieve both these goals.

Through the Corporate Governance mechanism, the Board of Directors of the Company 'Board' along with its Committees and Senior Management endeavors to strike the right balance with its various stakeholders. The 'Board' further believes that it has a fiduciary relationship and a corresponding duty to all its stakeholders' viz. customers, creditors, employees, vendors, community, the Government and shareholders, to ensure that their rights are well protected. At the highest level, the 'Board' continuously endeavors to improve upon governance aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward.

The Company is in compliance with the requirements of the guidelines on Corporate Governance as stipulated under Clause 49 of the Listing Agreement. We present hereunder our report on compliance of Corporate Governance conditions specified in revised Clause 49 of the Listing Agreement.

2. BOARD OF DIRECTORS

None of the Directors on the 'Board' is a member of more than 10 Committees or Chairman of more than 5 Committees across all the companies in which he/she is a Director. As required under Section 149(3) of the Companies Act, 2013, Ms. S. Banerjee, a lady Director has been appointed as an Independent Director on the 'Board'. All the Independent Directors have confirmed that they meet the 'independence' criteria as mentioned under the Clause 49 of the Listing Agreement as on 31st March 2015. The composition of the 'Board' is in conformity with Clause 49 of the Listing Agreement. The 'Board' met five times during the year and the time gap between any two meetings did not exceed 120 days.

Other provisions as to 'Board' and Committees

The 'Board' periodically reviews the compliance reports of all laws applicable to the Company. Steps are taken by the Company to rectify the instances of non-compliance, if any. The agenda along with explanatory notes (for Board and other meetings) are sent in advance to all Directors to get their input in the discussion. In case of business exigencies the Board's approval is taken through circular resolutions. The circular resolutions are noted at the subsequent Board Meeting.

Your Company's Directors promptly notify any change(s) in the committee positions as and when they take place.

Independent Directors

Your Company appointed Independent Directors who are renowned people having expertise/experience in their respective field/ profession. None of the Independent Directors are Promoters or related to Promoters. They do not have pecuniary relationship with the Company and further do not hold two percent or more of the total voting power of the Company.

Every Independent Director, at the first meeting of the 'Board' in which he/she participates as a Director and thereafter at the first meeting of the 'Board' in every financial year, gives a declaration that he/ she meets the criteria of independence as required under Section 149(7) of the Companies Act, 2013. All Independent Directors maintain their limits of directorships as required under Clause 49 of the Listing Agreement. The Company had issued a formal letter of appointment to all Independent Directors and the terms and conditions of their appointment have also been disclosed on the website of the Company.

Lead Independent Director

The 'Board' has designated Mr. S. K. Singhal as the Lead Independent Director. The Lead Independent Director's role is as follows:

- To preside over all meetings of Independent Directors.

-To ensure that there is an adequate and timely flow of information to Independent Directors.

- To liaise between the Chairman and Managing Director, the Management and the Independent Directors.

- To preside over meetings of the 'Board' and Shareholders when the Chairman and Managing Director is not present, or where he is an interested party.

- To perform such other duties as may be delegated to the Lead Independent Director by the Board/Independent Directors.

Meetings of Independent Directors

The Company's Independent Directors meet at least once in every financial year without the presence of Executive Directors or Management Personnel. Such meetings are conducted informally to enable Independent Directors to discuss matters pertaining to the Company's affairs and put forth their views to the Lead Independent Director. The Lead Independent Director takes appropriate steps to present Independent Directors' views to the Chairman and Managing Director.

During the year under review, the Independent Directors met once on 10th January, 2015, without the attendance of Executive Directors and Management Personnel. All the Independent Directors were present in that meeting.

The Independent Directors in the said meeting had, inter-alia:

i. reviewed the performance of Non-Independent Directors and the 'Board' as a whole;

ii. reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non­Executive Directors;

iii. assessed the quality, quantity and timeliness of flow of information between the Company's management and the 'Board' that is necessary for the 'Board' to effectively and reasonably perform their duties.

Induction & Training of Board Members

On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Managing Director & CFO on the Company's manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The induction for Independent Directors include interactive sessions with Executive Committee Members, Business and Functional Heads, visit to the manufacturing site, etc. On the matters of specialized nature, the Company engages outside experts/ consultants for presentation and discussion with the 'Board' members.

Code of Conduct 'Code'

Your Company has adopted a Code of Conduct for members of the 'Board' (incorporating duties of Independent Directors) and the Senior Management. The Code aims at ensuring consistent standards of conduct and ethical business practices across the Company. Your Company has received confirmations from all concerned regarding their adherence to the said Code.

Pursuant to Clause 49(II)(E) of the Listing Agreement, the Managing Director of the Company confirmed compliance with the Code by all members of the 'Board' and the Senior Management.

The full text of the Code is hosted on the Company's website, www.kicmetaliks.com

Code of Conduct for prohibition of insider trading

Your Company has adopted a Code of Conduct as per Securities and Exchange Board of India (SEBI) (Prohibition of Insider Trading) Regulations, 2015. All Directors, Designated Employees who could have access to the Unpublished Price Sensitive Information of the Company are governed by the Code. During the year under review, there has been due compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015.

3. BOARD COMMITTEES

A. Audit Committee

(a) The Company has an Audit Committee within the scope as set out in Clause 49 of the Listing Agreement read with Section 177 of the Companies Act, 2013. The Committee has three Independent, Non-Executive Directors and one Executive Director, all of whom are persons with considerable financial experience and expertise. Mr. S. K. Singhal, Chairman of the Committee is an Independent Director and was present at the last Annual General Meeting of the Company held on 9th September, 2014. Mr. Singhal, is a Mechanical Engineer with MBA (Finance) having an experience of around 20 years in the field of Project Management, Project Procurement, Contracting and Logistics in Oil & Petrochemical Industry and Steel Industry.

(b) The terms of reference, role and scope of the Audit Committee are in conformity with the provisions of Section 177 of the Companies Act, 2013 and Clause 49(III) of the Listing Agreement. The primary objective of the Audit Committee is to monitor and effectively supervise the Company's financial reporting process with a view to provide accurate, timely and proper disclosures and the integrity and quality of the financial reporting. The Audit Committee acts as a link between the Statutory and Internal Auditors and the Board of Directors. The Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement. The powers and role of the Audit Committee are as stated below :

Powers of the Audit Committee :

- To investigate any activity within its terms of reference.

- To seek information from any employees.

- To obtain outside legal or other professional advice.

- To secure attendance of outsiders with relevant expertise, if it considers necessary.

Role of the Audit Committee :

- Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.

- Recommendation for appointment, remuneration and terms of appointment of Internal Auditors and Statutory Auditors of the Company.

- Approval of payment to Statutory Auditors for any other services rendered by them.

- Reviewing, with the management, the annual financial statements and Auditor's Report thereon before submission to the 'Board' for approval, with particular reference to:

i. Matters to be included in the Director's Responsibility Statement for the inclusion in the Board's Report in terms of Section 134(3)(c) of the Companies Act, 2013.

ii. Changes, if any, in accounting policies and practices and reasons for the same.

iii. Major accounting entries involving estimates based on the exercise of judgment by management.

iv. Significant adjustments made in the financial statements arising out of audit findings.

v. Compliance with listing and other legal requirements relating to financial statements.

vi. Disclosure of Related Party Transactions.

vii. Qualifications in the draft Audit Report.

- Reviewing, with the management, the quarterly financial statements before submission to the 'Board' for approval.

- Review and monitor the Auditor's independence and performance, and effectiveness of audit process.

- Approval or any subsequent modification of transactions of the Company with related parties.

- Evaluation of internal financial controls and risk management systems.

- Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internal control systems.

- 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.

-Discussion with Internal Auditors of any significant findings and follow up there on.

- 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.

-To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

-To review the functioning of the Whistle Blower Policy/Vigil Mechanism.

-Approval of appointment of CFO or any other person heading the finance function or discharging that function after assessing the qualifications, experience and background, etc. of the candidate.

-Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

c) The Audit Committee met 4 (four) times during the financial year 2014-15 i.e. on 28th May, 2014; 14th August, 2014; 14th November, 2014 and 13th February, 2015 and not more than four months have elapsed between two meetings.

The composition of the Audit Committee as on 31st March, 2015 and attendance at the meetings of the Committee during financial year 2014-15 is as under :

 (d) The Audit Committee meetings are attended by the Chief Financial Officer of the Company. The Internal Auditors and Statutory Auditors are invited to each meeting of the Audit Committee. The Company Secretary acts as the Secretary to the Committee.

B. Nomination and Remuneration Committee

a) Pursuant to provisions of Section 178 of the Companies Act, 2013 and Listing Agreement and amendments there upon the existing Remuneration Committee of the 'Board' was renamed as Nomination and Remuneration Committee in the Board Meeting held on 28th May, 2014. All the members are Non-Executive, Independent Directors. The Nomination and Remuneration Committee met twice during the financial year 2014-15 on 28th May, 2014 and 17th July, 2014.

Terms of Reference : The terms of reference of the Nomination and Remuneration Committee are in conformity with the provisions of Section 178 of the Companies Act, 2013 and Clause 49(IV) of the Listing Agreement. The brief terms of reference of the Committee, inter alia, include the following :

- Formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the 'Board' a policy, relating to the remuneration of the Director, 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.

Nomination and Remuneration Policy :

The Company has adopted a policy relating to the remuneration for Directors, Key Managerial Personnel and Senior Management Personnel of the Company which is displayed on the website of the Company and is annexed herewith as 'Annexure - F' and forms part of the Directors' Report.

C. Stakeholders' Relationship Committee

Pursuant to provisions of Section 178(5) of the Companies Act, 2013 and Listing Agreement and amendments there upon, the existing Shareholders'/Investors' Grievance Committee of the 'Board' was renamed as Stakeholders Relationship Committee in the Board Meeting held on 28th May, 2014. This committee comprises of three Non Executive Independent Directors.

This Committee is specifically formed to look into the redressal of grievance of shareholders, debenture holders and other security holders. This committee shall consider and resolve the grievance of all the security holders of the Company including complaints related to transfer of shares, non-receipt of Balance Sheet, non-receipt of declared dividend, etc. 25

During the financial year 2014-15, the committee met 5 (Five) times on 28th May, 2014; 14th August, 2014; 14th November, 2014; 26th December, 2014 and 13th February, 2015.

Name, designation and address of Compliance Officer :

Mrs. R. Fogla (Dhanuka) Company Secretary K I C Metaliks Limited

"Sir RNM House" 3B, Lal Bazar Street, 4th Floor, Room No. 2, Kolkata - 700 001

Phone : +91-33-30688681/83 Fax : +91-33-40019636

E-mail : companysecretary@kicmetaliks.com  

Shareholder/Investor Complaints received and redressed during financial year 2014-15 :

Particulars

Number of complaints pending as on 1st April, 2014 0

Number of complaints received during 1st April, 2014 to 31st March, 2015 8

Number of complaints disposed off during the year ended on 31st March, 2015 8

Number of complaints pending as on 31st March, 2015 Nil

5. OTHER DISCLOSURES

a)Details regarding contracts and arrangements with related parties have been disclosed in point no. 16.3 of the Director's Report.

b)The Register of Contracts is placed at the meetings of the 'Board' as per the requirements of the Companies Act, 2013 and all the related party transactions that have been entered into by the Company during the year under review, requiring entry in the Register of Contracts maintained as per provisions of Section 189 of the Companies Act, 2013 read with Rule 16 of the Companies (Meetings of Board and its Powers) Rules, 2014 have been duly entered therein.

c)The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India and in the preparation of financial statements, the Company has not adopted a treatment different from that as prescribed in an Accounting Standard.

d)The procedures for risk assessment and minimisation have been disclosed in point no. 17 of the Directors' Report and point no. 4 of Management Discussion and Analysis Report.

e) During the financial year 2014-15, the Company had not issued any form of Share Capital.

f)The relevant disclosures on the remuneration of Directors have been included under 'Nomination and Remuneration Policy1 annexed as 'Annexure - F' to the Directors' Report..

g)The Company has duly complied with the requirements of the regulatory authorities on Capital Markets. No penalties, strictures have been imposed on the Company by Stock Exchange or SEBI or by any statutory authority, on any matter related to the capital markets, during the last three years.

H)The Company has fully complied with the mandatory requirements of the Listing Agreement and with regard to non-mandatory requirements the Internal Auditor directly reports to the Audit Committee.

i) Details regarding the establishment of Vigil Mechanism/Whistle Blower Policy have been disclosed in point no. 13 of the Director's Report.

j) The Company does not have any subsidiary.

k) Details of Directors seeking appointment/re-appointment at the ensuing Annual General Meeting as required under Clause 49 of the Listing Agreement is annexed to the Notice convening the 28th Annual General Meeting of the shareholders of the Company.

6. MEANS OF COMMUNICATION

(a) Quarterly Results

i) Which newspapers normally published in : English Bengali

Business Standard (All editions) Arthik Lipi

ii) Any website displayed : www.kicmetaliks.com

(b) Whether website also displays official news releases :Yes

(c) Whether presentations made to institutional investors or analysts :No

7. GENERAL SHAREHOLDER INFORMATION

(a) AGM :

 Date and Day 29th September, 2015 (Tuesday)

Time 10:00 a.m.

Venue "Rotary Sadan" (Shripati Singhania Hall), 94/2, Chowringhee Road, Kolkata 700 020

(b) Financial Calendar (tentative and subject to change)

Financial reporting for the quarter ending 30th June, 2015 By End July, 2015

Financial reporting for the quarter ending 30th September, 2015 By End October, 2015

Financial reporting for the quarter ending 31st December, 2015 By End January, 2016

Financial reporting for the year ending 31st March, 2016 By End May, 2016

(c) Book Closure period

From 23rd September, 2015 to 29th September,2015 (both days inclusive)

(d) Dividend Payment Date

The Directors have not recommended any dividend for the financial year 2014 – 2015

(e) Listing on Stock Exchange(s)

The Company’s securities are currently listed at ‘BSE Limited’

Scrip Code – 513693

Scrip ID – KAJARIR

f) Listing & Custodian Fees for the financial year 2014-15

The Company has paid the Listing Fees for the financial year 2014­2015 to BSE Limited. The Company has also paid custodian fees for the financial year 2014-15 to National Securities Depository Limited and Central Depository Services (India) Limited

ISIN No. : INE 434C01019

Depository Connectivity : NSDL and CDSL

(g) Registrar and Transfer Agents M/s. S. K. Infosolutions Pvt. Ltd.

34/1A, Sudhir Chatterjee Street, Kolkata - 700 006

Phone : 91-33-22194815/6797

(h) Share Transfer System

The share transfer/transmission/splits and/or issue of duplicate share certificates are processed on behalf of the Company by the Registrar and Transfer Agent, M/s. S. K. Infosolutions Pvt. Ltd. and is then placed before the Company Secretary/ Managing Director who had been delegated the authority by Share Transfer Committee to approve transfers. They address all the requests fortnightly.

(i) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely equity

Nil

Plant Location - Pig Iron Plant :

Raturia, Angadpur Durgapur - 713 215, West Bengal Phone: +91-9874943342

(j) Address for Correspondence

Registered Office :

"Sir RNM House", 3B, Lal Bazar Street, 4th Floor, Room No.2, Kolkata - 700 001 Phone : +91-33-30688681/30688683 Fax : +91-33-40019636 Email : info@kicmetaliks.com

 (k) Reconciliation of Share Capital Audit

In compliance of Regulation 55A of SEBI (Depositories and Participants Regulations) 1996, a Practicing Company Secretary carried out quarterly audits, reconciling the issued shares of the Company with the aggregate of the number of shares held by the investors in physical form and in electronic form with the depositories. The Reconciliation of Share Capital Audit Reports were submitted to the stock exchange within the prescribed time limit. As on 31st March, 2015 there was no difference between the issued shares and the aggregate of the number of shares held by the investors in both physical form and in electronic form with the depositories. 69.93 Lakhs Equity Shares representing 98.51% of the issued Equity Share Capital have been dematerialized as on 31st March, 2015.

For and on behalf of the Board of Directors

R. S. Jalan

Chairman and Managing Director

Place : Kolkata

Dated : The 30th day of May, 2015