REPORT ON CORPORATE GOVERNANCE
I. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company’s philosophy on Corporate Governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operation, and all its interactions with the stakeholders including shareholders, employees, customers, government and suppliers.
II. BOARD OF DIRECTORS
a. Board Composition and Category of Directors, Attendance of Directors at Board Meetings and at Last Annual General Meeting (AGM) and Number of other Directorships and Chairmanships / Memberships of Committees of each director in various Companies, Shareholding in the Company thereto.
The Company has an appropriate combination of Executive and Non-Executive Directors including Independent Directors to maintain independence of the Board. The Directors have expertise in the fields of industry, operations, finance, legal and management. The Board provides strategic guidance and independent views to the Company’s management while discharging its fiduciary responsibilities.
Structure of Board of Directors during the financial year 2015-16, attendance of each director at Board meetings and Annual General Meeting (AGM) held during the said year, number of other directorships and chairmanships / memberships of committees of each director in various companies, shareholding of the Non Executive Directors in the Company as per the requirements of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the following table:
Note: * Mr. Bharat Bhushan Chadha ceased to be a Director w.e.f. 3rd November, 2015 $ Includes only Audit Committee and Shareholders’ / Investors’ Grievance Committee in all public limited companies (whether listed or not) and excludes private limited companies, foreign companies and Section 8 companies.
Mr. Babulal Agarwal is maternal uncle of Mr. Rajesh R. Gupta and Mr. Mukesh R. Gupta. Mr. Rajesh R. Gupta and Mr. Mukesh R. Gupta are brothers.
b. Board Meetings
The Board meets at regular intervals to discuss and decide on Company’s business policies and strategy apart from other regular business matters. Board Meetings are usually held at the Corporate Office of the Company at Mumbai. During the financial year ended on 31st March, 2016, Four Board Meetings were held on 10th April, 2015; 31st July, 2015; 6th November, 2015 and 15th January, 2016. Maximum time gap between two consecutive meetings had not exceeded 120 days.
The agenda and notes are circulated to the Directors in advance. All material information is included in the agenda for facilitating meaningful discussions at the meeting. In case of urgent necessity, resolutions are passed by circulation in accordance with the provisions of Companies Act, 2013. Business Unit heads and senior management personnel make presentations to the Board. The Board is updated on the discussions held at the Committee meetings and the recommendations made by various Committees.
c. Selection of Independent Directors
Considering the requirement of skill sets on the Board, eminent people having an independent standing in their respective field/profession, and who can effectively contribute to the Company’s business and policy decisions are considered by the Nomination and Remuneration Committee, for appointment, as Independent Directors on the Board. The Committee, inter alia, considers qualification, positive attributes, area of expertise and number of Directorships and Memberships held in various committees of other companies by such persons in accordance with the Company’s Policy for Selection of Directors and determining Directors’ independence. The Board considers the Committee’s recommendation, and takes appropriate decision.
Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under law.
d. Performance evaluation of Independent Directors
The Nomination and Remuneration Committee has laid down the criteria for performance evaluation of
Independent Directors. The framework of performance evaluation of the Independent Directors will capture the following points:
1. Key attributes of the IDs that justify his / her extension / continuation on the Board of the Company;
2. Participation of the Directors in the Board proceedings and his / her effectiveness;
3. The assessment to determine the key attributes of the Directors should cover the following:
i) Relevant experience and skills Impact:
l Ability and willingness to speak up
l Ability to carry others
l Ability to disagree, stand his/her ground Integrity:
l Focus on shareholder value creation
l High governance standards
ii) Assessment of Committee's Effectiveness Knowledge of business:
l Competition and competitive structure
l Markets and customers
l Suppliers and dealers
e. Separate meetings of the Independent Directors
The Independent Directors held a Meeting on 15th January, 2016, without the attendance of Non- Independent Directors and members of Management. All the Independent Directors were present at such meeting. At the Meeting, they –
1. Reviewed the performance of non-independent directors and the Board as a whole;
2. Reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors;
3. Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The Independent Directors hold an unanimous opinion that the non independent Directors, including the Managing Director bring to the Board, abundant knowledge in their respective field and are experts in their areas. Besides, they are insightful, convincing, astute, with a keen sense of observation, mature and have a deep knowledge of the Company.
The Board as a whole is an integrated, balanced and cohesive unit where diverse views are expressed and dialogued when required, with each Director bringing professional domain knowledge to the table. All Directors are participative, interactive and communicative.
The Chairperson has abundant knowledge, experience, skills and understanding of the Board's functioning, possesses a mind for detail, is meticulous to the core and conducts the Meetings with poise and maturity.
The information flow between the Company's Management and the Board is complete, timely with good quality and sufficient quantity.
f. Familiarization programme for Independent Directors
Whenever any person joins the Board of the Company as an Independent Director, an induction programme is arranged for him / her wherein he / she is familiarised with the Company, their roles, rights and responsibilities in the Company, the code of conduct to be adhered, nature of the industry in which the Company operates, business model of the Company, meeting with the senior management team members, etc.
The detail of such familiarization programme is disclosed on the Company's website at www.lloyds.in.
III. COMMITTEES OF THE BOARD
The Board Committees play a vital role in strengthening the Corporate Governance practices and focus effectively on the issues and ensure expedient resolution of the diverse matters. The Committees also make specific recommendations to the Board on various matters when required. All observations, recommendations and decisions of the Committees are placed before the Board for information or for approval. The Board of Directors has, from time to time, constituted the following Committees, namely:
Composition of Audit Committee
The Committee was reconstituted in the Board meeting held on 6th November, 2015 due to the resignation of Mr. Bharat Bhushan Chadha from the post of Directorship of the Company. The Committee’s composition meets with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company Secretary acts as the secretary to the Committee.
Meetings and Attendance of Audit Committee
Four Audit Committee meetings were held during the financial year 2015-16 on 10th April, 2015; 31st July, 2015;
Terms of Reference of the Audit Committee Powers of the Audit Committee
l To investigate any activity within its terms of reference
l To seek information from any employee
l To obtain outside legal or other professional advice
l To secure attendance of outsiders with relevant expertise, if it considers necessary
Role of the Audit Committee, inter alia, includes the following:
a. 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;
b. Recommending the appointment, remuneration and terms of appointment of statutory auditors including cost auditors of the Company;
c. Approving payment to statutory auditors, including cost auditors, for any other services rendered by them;
d. Reviewing with the management, the annual financial statements and auditors report thereon before submission to the Board for approval, with particular reference to;
l Matters required to be included in the Directors’ 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;
l Changes, if any, in accounting policies and practices and reasons for the same;
l Major accounting entries involving estimates based on the exercise of judgement by the management;
l Significant adjustments made in financial statements arising out of audit findings;
Compliance with listing and other legal requirements relating to financial statements;
l Disclosure of any related party transactions; and Modified opinion in draft audit report;
e. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
f. Reviewing with the management, the statement of uses/ application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
g. Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
h. Approval or any subsequent modification of transactions of the Company with related parties;
i. Scrutiny of inter-corporate loans and investments;
j. Valuation of undertakings or assets of the Company, wherever it is necessary;
k. Evaluation of internal financial controls and risk management systems;
l. Reviewing, with the management, the performance of statutory auditors and internal auditors, adequacy of internal control systems;
m. 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;
n. Discussion with internal auditors of any significant findings and follow-up thereon;
o. Reviewing the findings of any internal investigations by the internal auditors into 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;
p. 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;
q. To look into the reasons for substantial defaults, if any, in the payment to depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
r. To review the functioning of the Whistle Blower mechanism;
s. Approval of appointment of the CFO after assessing qualifications, experience and background, etc. of the candidate;
t. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee;
u. Reviewing the following information;
l The Management Discussion and Analysis of financial condition and results of operations;
l Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
l Management letters/letters of internal control weaknesses issued by the statutory auditors;
l Internal audit reports relating to internal control weaknesses; and Reviewing the appointment, removal and terms of remuneration of the Chief internal auditor / internal auditor(s);
l Statement of deviations;
(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
(b) annual statement of funds utilized for purposes other than those stated in the offer document/ prospectus/notice in terms of Regulation 32(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The Committee was reconstituted in the Board meeting held on 6th November, 2015 due to the resignation of Mr. Bharat Bhushan Chadha from the post of Directorship of the Company. The Committee’s composition meets with requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the financial year 2015-2016, no meetings of Nomination and Remuneration Committee were held.
Terms of Reference of the Committee, inter alia, includes the following:
l To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and to recommend to the Board their appointment and/or removal;
l To carry out evaluation of every Director’s performance;
l To formulate the criteria for determining qualifications, positive attributes and independence of a Director, and recommend to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees;
l To formulate the criteria for evaluation of performance of Independent Directors and the Board;
l To decide whether to extend or continue the term of appointment of Independent Director, on the basis of the report of performance evaluation of independent directors;
l To devise a policy on Board diversity;
l To recommend/review remuneration of the Managing Director(s) and Whole-time Director(s) based on their performance and defined assessment criteria;
l To carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification, as may be applicable;
l To perform such other functions as may be necessary or appropriate for the performance of its duties.
The tenure of office of the Mr. Babulal Agarwal, Managing Director is for three years from 1st January, 2015 to 31st December, 2017. There is no provision for notice period and payment of severance fees. The Non Executive Directors are paid only sitting fees on the recommendation of Nomination and Remuneration Committee.
There were no pecuniary relationships or transactions of Non-Executive Directors vis-à-vis the Company. The Company has not granted any stock option to any of its Non-Executive Directors.
VI. MEANS OF COMMUNICATION
Information like quarterly / half yearly / annual financial results and press releases on significant developments in the Company that have been made available from time to time, are hosted on the Company’s website www. lloyds.in and have also been submitted to the Stock Exchanges to enable them to put them on their websites and communicate to their members. The quarterly half-yearly / annual financial results are published in Business Standard (English) and Mumbai Lakshadweep (Marathi) newspapers. The Company is electronically filing all reports / information including Quarterly Results, Shareholding Pattern and Corporate Governance Report etc on the BSE website i.e www.listing.bseindia.com.
VII. GENERAL SHAREHOLDER INFORMATION
a. Annual General Meeting
b. Date: Friday 10th June, 2016.
c. Time: 12.30 p.m
d. Venue: Plot No. A 1-2, MIDC Area, Ghugus, Dist Chandrapur, 442 505, Maharashtra
b. Financial Year
1st April, 2015 to 31st March, 2016
c. Dividend Payment Date
No Dividend was declared during the financial year 2015-16.
d. Listing on Stock Exchange and Stock Code
BSE Limited (BSE)
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai 400 001
Stock Code: 512455
ISIN No.: INE281B01024
e. Annual listing fee
Annual listing fee for the year 2016-17 shall be paid to BSE within due date.
g. Registrar and Share Transfer Agent
Bigshare Services Private Limited E-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andher East, Mumbai 400072. Phone : 022-40430200 Fax : 022-28475207 E-Mail : email@example.com
h. Share Transfer System
Share Transfer request are registered within a period of 15 days from the day of receipt. Share transfer request in physical form with demat request have been discontinued from February 2004 in terms of SEBI directive.
i. Reconciliation of Share Capital Audit
The Reconciliation of Share Capital Audit is conducted by a Chartered Accountant in practice to reconcile the total admitted capital with National Securities Depository Limited and Central Depository Services (India) Limited ("Depositories") and the total issued and listed capital. The audit confirms that the total issued/paid-up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialised form (held with Depositories) and that the requests for dematerialisation of shares are processed by the R&T agent within stipulated period of 21 days and uploaded with the concerned depositories.
l. Dematerialisation of Shares
Over 96.94 % of the shares have been dematerialized upto 31st March, 2016. Trading in Equity Shares of the Company is permitted only in dematerialized form w.e.f. 8th May, 2000 as per notification issued by the Securities and Exchange Board of India.
Liquidity: Company’s Shares are traded on the Bombay Stock Exchange.
m. Information on Deviation from Accounting Standards, if any
There has been no deviation from the Accounting Standards in preparation of annual accounts for the financial year 2015-16
n. Outstanding GDRs/ ADRs/ Warrants or any convertible instruments, Conversion date and date and likely impact on the Equity:-
o. Commodity price risk or foreign exchange risk and hedging activities:
p. Plant locations Sponge Iron & Power Plant
Plot No. A-1/2, MIDC Area, Ghugus, Dist. Chandrapur- 442 505. Maharashtra State.
q. Green Initiative
Pursuant to section 101 of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, the Company can send Notice of Annual General Meeting, financial statements and other Communication in electronics forms. This Company is sending the Annual Report including the Notice of Annual General Meeting, Audited Financial Statements, Directors Report, Auditors Report along with their annexure etc. for the financial year 2015-16 in the electronic mode to the shareholders who have registered their e-mail ids with the Company and/or their respective Depository Participates (DPS).
Shareholders who have not registered their e-mail addresses so far are requested to register their e-mail addresses. Those holding shares in demat form can register their e-mail addresses with their concerned DPs. Shareholders who hold shares in physical form are requested to register their e-mail addresses with the Company, by sending a letter, duly signed by the first/ sole holder quoting details of Folio No.
r. Address for Correspondence
For transfer / dematerlisation of shares, payment of dividend on shares, interest and redemption of debentures, and any other query relating to the shares and debentures of the Company
Bigshare Services Private Ltd E-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri(East), Mumbai – 400072. Tel No. – 022 – 4043 0200 Fax No. – 022 – 2847 5207 E-Mail: firstname.lastname@example.org
Any query on Annual Report
Secretarial Department: Trade World, ‘C’ wing,16th Floor, Senapati Bapat Marg, Lower Parel (W), Mumbai- 400 013. Tel. No. 022-3041 8263 Fax No. 022-3041 8260 E-Mail: email@example.com
VIII. OTHER DISCLOSURES
a. Disclosures on materially significant related party transactions that may have potential conflict with the interests of listed entity at large;
There were no transactions with related parties pursuant to section 188 of Companies Act, 2013. The policy on dealing with related party transaction is placed on the Company’s website at www.lloyds.in.
b. Details of non-compliance by the listed entity, penalties, strictures imposed on the listed entity by stock exchange(s) or the board or any statutory authority, on any matter related to capital markets, during the last three years :
c. Details of establishment of vigil mechanism, whistle blower policy, and affirmation that no personnel has been denied access to the audit committee:
The Company has formulated Whistle Blower Policy & established Vigil Mechanism in the Board Meeting held on 21st January, 2015 for the directors and employees of the Company to report, serious and genuine unethical behavior, actual or suspected fraud and violation of the Company’s code of conduct or ethics policy.
No personnel have been denied access to the audit committee.
d. Details of Compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause:
The Company has complied with all the mandatory requirements. As regards the Non-Mandatory requirements they are complied with to the extent possible.
e. Web link where policy for determining material subsidiaries is disclosed:
f. Weblink where policy on dealing with Related Party Transactions:
g. Disclosure of Commodity Price Risks and Commodity Hedging Activities:
IX. ADOPTION OF MANDATORY AND NON MANDATORY REQUIREMENTS
The Company has complied with all mandatory requirements of Corporate Governance under the erstwhile clause 49 of the listing agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has adopted following non-mandatory requirements as per Part E of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:
Reporting of Internal Auditor
The Internal Auditor directly reports to the Audit Committee
X. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the listed entity shall disclose the following details in its annual report, as long as there are shares in the unclaimed suspense account. The details of Lloyds Metals and Energy Limited unclaimed suspense account are as follows:-
XI. COMPLIANCES UNDER ERSTWHILE LISTING AGREEMENT AND SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Company has complied with the provisions of the erstwhile Listing Agreement. Information, certificates and returns as required under erstwhile Listing Agreement are sent to the stock exchanges within the prescribed time.
The Company has complied with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
XII. CERTIFICATE ON COMPLIANCE WITH CODE OF CONDUCT
This Code has been laid down with a view to promote good corporate governance and exemplary personal conduct and is applicable to all the Directors and Senior Managerial Personnel of the Company. This Code is also available on the website of the Company www.lloyds.in.
Declaration of compliance of the Code of Conduct in terms of Schedule V (D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given hereunder:
In terms of Regulation 26 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per ‘affirmation of compliance’ letters received from the Directors and the members of senior managerial personnel of the Company, I hereby declare that members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management during the financial year 2015-16."
For and on behalf of the Board
Mukesh R. Gupta
Date : 14th April, 2016
Place : Mumbai