REPORT ON CORPORATE GOVERNANCE FOR THE 12 MONTHS PERIOD ENDED
31ST MARCH, 2015.
1. Corporate Governance Philosophy
Corporate Governance, in essence, is a set of systems and procedures which aims to ensure that the Company is managed to suit the best interest of all its stakeholders with an objective to maximize their wealth. The stakeholders may be Promoters, Shareholders, Customers, Lenders, Vendors, Government or Employees. The concept of Corporate Governance hinges on total transparency, integrity and accountability of the Management. Kinetic Engineering Limited (KEL) believes in total transparency in sharing all relevant information with all its stakeholders and the Company is quite confident that the information shared would in turn contribute to improve the overall performance of the Company and further would strengthen relationship of the Company with all above.
2. Board of Directors
2.1 Presently, the Board of the Company comprises eight members, out of which five are Non-Executive Directors and out of five Non-Executive Directors, four are Independent Directors. The Non-Executive Directors of the Company are highly experienced professionals in theirfields and in the corporate world.
2.2 The Board is headed by an Executive Chairman.
2.6 Attendance of Directors at Board Meetings and at the last Annual General Meeting:
During the 12 months period ended 31st March, 2015 (hereinafter referred to as 'the period under review'), 6 Board Meetings were held on 22nd April, 2014,24th May, 2014,28th June, 2014,14thAugust, 2014,13th November, 2014, and 12th February, 2015. The maximum time gap between any two Board Meetings was not more than four months. The details of Attendance of Directors at the Board Meetings and at the last Annual General Meeting are as hereunder:
The Board reviews Compliance Report of all laws applicable to the Company prepared by the Company as well as steps taken by the Company to rectify instances of non-compliance.
2.7 Pecuniary relationship or transactions of Non-Executive Directors: Nil
2.8 Code of Conduct
The Board of Directors has laid down Code of Conduct, for Board Members and designated Senior Management and Employee of the Company. These Codes have been posted on the Company's website <http://www.kineticindia.com/>. All Board Members and Senior Management personnel have affirmed compliance with these Codes of Conduct. A declaration signed by the Managing Director to this effect is enclosed at the end of this report. 3. Audit Committee
3.1 Brief description of Terms of Reference
To oversee the Company's financial reporting process, to review Directors' Responsibility Statement, changes, if any, in accounting policies and reasons for the same, qualifications in the draft audit report, performance of statutory and internal auditors, reports of the Company's internal auditors, cost auditor and financial statements audited by the statutory auditors and also to review the information relating to Management Discussion and Analysis of financial conditions and results of operations, statement of significant related party transactions, management letter(s) of internal control weaknesses, if any, issued by statutory auditors.
.3 Meetings and attendance during the period under review:
During the 12 months period ended on 31st March, 2015, 4 Meetings of the Audit Committee were held on 24th May, 2014, 14th August, 2014, 13th November, 2014, and 12th February, 2015. Details of attendance of the Members at the meeting were as follows:
The Head of Finance Department, Internal Auditors, Statutory Auditors, and other Senior Executives members of the Company are also invited to attend the Audit Committee. The Company Secretary acts as Secretary to the Committee.
4. Nomination and Remuneration Committee (formerly termed as Remuneration Committee) 4.1 Brief description of Terms of reference
In accordance with Section178 of the Companies Act, 2013 and as per the requirements of SEBI Circular dated April 17, 2014 for amendment to Equity Listing Agreement (which is effective from October 1, 2014), the Board of Directors of the Company at their meeting held on April 22, 2014, have approved the change in nomenclature of the Remuneration Committee to Nomination and Remuneration Committee and have revised their role as under:
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.
Formulation of criteria for evaluation of Independent Directors and the Board;
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 directors, key managerial personnel and other employees;
Devising a policy on Board diversity;
4.3 Remuneration Policy
For the purpose of fixing the amount of remuneration of Executive Directors, the Remuneration Committee takes into account various factors viz. remuneration package offered to Senior Directors in the automobile and engineering industry, trends in industry, financial position of the Company, performance of the Executive Directors, their qualifications, experience and past remuneration, terms of employment, etc. The components of remuneration include Basic Salary, Allowances, Perquisites and Retirement Benefits cAll the above remuneration was fixed/ varies with respect to time-scale. The above mentioned Vice Chairperson and the Managing Director were appointed for a period of 5 years. Terms of appointment of above Vice Chairperson and Managing Director do not provide for any notice period or severance fee. The Company has filed relevant form with the Central Government, seeking approval for the remuneration fixed for the Vice Chairperson and the Managing Director. The Central Government has approved the remuneration of Vice Chairperson and for the remuneration of Managing Director is awaited from Ministry of Corporate Affairs.
Non-Executive Directors of the Company are paid sitting fees @ Rs. 2,000 per meeting of the Board or Committee thereof attended by them besides re-imbursement of expenses on traveling etc. No commission is being paid to Non-Executive Directors.
. Stakeholders Relationship Committee (formerly termed as Shareholders' Grievance Committee)
Shareholders' Grievance Committee consists of Mr. S. R. Kotecha as its Chairman and Mr. J. H. Munot, Dr. K. H. Sancheti as Members, to look into redressing of shareholders complaints with respect to transfer of shares, non-receipt of Annual Report, non-receipt of declared dividend etc. During the period under review, no meeting of Shareholders' Grievance Committee was held.
No. of shareholders complaints received during the period under review: 2
No of complaints not resolved to the satisfaction of the shareholders: 2
No. of pending Complaints as on 31st March, 2015: Nil
During the 12 months under review the Company has dispatched share certificates within the period of 15 days.
6. Performance evaluation of Directors
The Nomination and Remuneration Committee of the Board laid down the criteria for performance evaluation of all Directors. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated. The criteria for performance evaluation are as follows:
Role & Accountability
- Understanding the nature and role of Independent Directors' position.
- Understanding of risks associated with the business.
- Application of knowledge for rendering advice to management for resolution of business issues.
- Offer constructive challenge to management strategies and proposals.
- Active engagement with the management and attentiveness to progress of decisions taken.
- Non-partisan appraisal of issues.
- Own recommendations given professionally without tending to majority or popular views.
Leadership & Initiative
- Heading Board Sub-committees.
- Driving any function or identified initiative based on domain knowledge and experience.
- Commitment to role & fiduciary responsibilities as a Board member.
-Attendance and active participation.
- Proactive, strategic and lateral thinking.
7. Meeting of Independent Directors
During the year, meeting of Independent Directors was held to review the performance of the Board as a whole on parameters of effectiveness and to assess the quality, quantity and timeliness of flow of information between the management and the Board.
Mr. Shirish R. Kotecha, Chairman of the Meeting presented the views of the Independent Directors on matters relating to Board processes and the overall affairs of the Company to the full Board.
Whistle Blower Policy
Your Company has established a Vigil Mechanism/ Whistle Blower Policy to enable stakeholders (including Directors and employees) to report unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The Policy provides adequate safeguards against victimisation of Director(s) / employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any reported under this Policy will be appropriately and expeditiously investigated by the Chairman.
Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.
The Whistle Blower Policy has been disclosed on the Company's website under the web link www.kineticindia.com / investors and circulated to all the Directors / employees.
8. 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, 1992. 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, 1992.
9. Compliance Officer
Mr. Rohit Purandare, Company Secretary is the Compliance Officer for complying with the requirements of SEBI Regulations and the Listing Agreement with the Stock Exchange.
10. Annual General Meetings
The details of the last three Annual General Meetings of the Company are as hereunder:
During the last Financial Year, no special resolution was passed by postal ballot.
None of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing a special resolution through postal ballot.
(i) Disclosure on materially significant related party transactions i.e. transactions of the Company of material nature with its promoters, the directors or management, their subsidiaries or relatives etc. that may have potential conflict with interests of Company at large:
Normal trade transactions were entered into by the Company with the related parties. The Executive Directors are paid remuneration. The disclosures on related party transactions as per Accounting Standard 18 notified in the Companies (Accounting Standard) Rules, 2006, are given in Note No. 21 in Notes Forming part of the Accounts for the year ended on 31 st March, 2015.
(ii) There were no penalties, nor any strictures imposed on the Company by SEBI or any Statutory authority, on any matter related to capital markets.
(iii) Company has in place a Suggestion Box system for free communication between workers, staff and management. No employee has been denied access to the Audit Committee.
(iv) Company has complied with all mandatory requirements of clause 49 of Listing Agreement in respect of Corporate Governance.
(v) The status of implementation of non-mandatory requirements on Corporate Governance recommended under clause 49
of the Listing Agreement is as under: The Board has set up Nomination and Remuneration Committee comprising of 3 non-executive Independent directors.
12. Means of Communication
The Company's Unaudited Quarterly Financial Results were published in 'ASIAN AGE' and 'LOKSATTA' newspapers. The results are also displayed on Corporate Website - www.kineticindia.com. No presentation was made to Institutional Investors or Analysts.
Management Discussion and Analysis is forming part of Directors' Report.
13. General Shareholders Information
The 44th Annual General Meeting is proposed to be held on 30. 09. 2015 at 11:00 a.m. at the Registered Office of the Company at D-1 Block, Plot No.18/2, MIDC, Chinchwad, Pune - 411019, for adopting the Audited Accounts for the period ended 31.3.2015. Dates of Book-Closure: 28.09.2015 to 30.09.2015 (both days inclusive).
Dividend Payment Date:
The Directors have not recommended any Dividend for the 12 months period ended on 31 st March, 2015.
Listing of Shares on Stock Exchanges:
The shares of the Company are listed on Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalai Street, Fort Mumbai - 400 001
Payment of Listing Fees:
Annual listing fee for the year 2015-16 (as applicable) has been paid by the Company to the stock exchange.
Stock Code and ISIN:
BSE (Equity Shares) : 500240
ISIN for equity shares : INE266B01017
Registrars and Transfer Agents:
The Company's equity shares are compulsorily traded in Demat mode and hence transferable through the depository system. Link Intime India Pvt Limited, Akshay Complex, Block No.202,2nd floor, Dhole Patil Road, Pune-411001 have been appointed as Company's Registrars and Transfer Agent as perSEBI's Circular for appointment of Common Agency to carry physical and electronic share registry work.
Share Transfer System:
All the transfers received are processed by the Registrars and Transfer Agent and approved by the Authorised Directors/ Company Secretary of the Company. The share transfers, which are received in physical form, are processed and the share certificates returned within a period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects.
Dematerialisation of Shares
The Company shares are compulsory traded in dematerialised form. As on 31st March, 2015 the details of the shares of the Company held in physical and demat form are given below:
The Company has not issued any GDRs / ADRs.
Warrants / other convertible securities outstanding at the end of the financial year:
Allotted on 14/02/2008 Foreign Currency Convertible Bonds (FCCBs) of the value of USD 18 million (' 7066.80 lakh). The Bond holders have exercised the option of redemption of the FCCB in February 2014. Company has successfully reached a settlement with Bond holders is awaiting RBI approval for execution of the same.
Plant Locations : The Company's plant is located at Ahmednagar (Maharashtra).
Address for correspondence:
Shareholder's correspondence may be addressed to the registrars Link Intime India Pvt. Limited, Block No. 202, Akshay Complex, 2nd floor, Dhole Patil Road, Pune-411001. Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants. Investor grievances, queries, etc. can be additionally marked to firstname.lastname@example.org
Declaration by the Managing Director under Clause 49(I)(D)
"Pursuant to Clause 49(I)(D) of the Listing Agreement with the Stock Exchanges, I hereby declare that all Board Members and Senior Management Personnel of the Company have affirmed Compliance with the relevant provisions of the Code of Conduct of the Company for the 12 months period ended 31 st March, 2015."
Certificate by Managing Director and Finance Head under Clause 49(V)
Certificate by the Managing Director and Finance Head, has been furnished to the Board of Directors of the Company, as required under the Clause 49(V) of the Listing Agreement.
For Kinetic Engineering Limited
Date: 13th August, 2015