REPORT ON CORPORATE GOVERNANCE FOR THE FINANCIAL YEAR 2014-15
The Company has been following High standards of Corporate Governance Principles, Policies and Practices over the years.
I) METALYST'S GOVERNANCE POLICY
At Metalyst, Corporate Governance is all about maintaining an open, fair and trustworthy relationship with its customers and stakeholders. The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. We believe Corporate Governance is a never-ending process on a path to improve and be better. The Board acknowledges its responsibilities towards its Stakeholders for creating and safeguarding their wealth. The Company is in full compliance with the requirements of Corporate Governance under Clause 49 of the Listing Agreement with the Indian Stock Exchanges.
Recently, the Securities Exchange Board of India (SEBI) sought to amend the equity Listing Agreement to bring in additional Corporate Governance norms for listed entities. These norms provide for stricter disclosures and protection of investors rights, including equitable treatment for minority and foreign shareholders.
II) BOARD OF DIRECTORS
At Metalyst, the Board along with its Committees provides leadership and guidance to the Company's management as also direct, supervise and control the performance of the Company. We believe an active, well-informed board is vital to attain the highest standards of Corporate Governance. An independent and strong board is the utmost requirement of the Company so as to ensure that the best practices are adopted by the Company. At Metalyst, we have a proper blend of Executive and Independent directors, who have rich knowledge and experience in the industry for providing strategic guidance and direction to the Company.
A. INDEPENDENT DIRECTORS
All the Independent Directors have confirmed that they meet the 'independence' criteria as mentioned under the existing Clause 49 of the Listing Agreement and Section 149 of the Companies Act, 2013.
None of Directors of the Company's Board is a member of more than 10 committees and Chairman of more than 5 Committees (Committees includes Audit Committee and Stakeholder Relationship Committee) across all Indian Public Companies in which he is a director. All the directors have made necessary disclosures regarding Committee positions held by them in other companies and do not hold the office of Director in more than twenty companies, including ten public companies. None of the directors are related to each other.
The Familiarization Program for Independent Directors has been adopted by the Board of Directors pursuant to Clause 49 of Listing Agreement, the detailed policy is available at the website of the Company (www. amtek.com)
B. COMPOSITION OF BOARD
The Company's policy is to maintain an optimum combination of Executive & Non-executive directors and inconformity with Clause 49 of the Listing Agreement entered into with the stock exchanges.
C. BOARD PROCEDURES AND MEETINGS ATTENDANCE RECORD OF DIRECTORS
The Board of Directors of your Company plays a pivotal role in ensuring good governance and functioning of the Company. The Board's role, functions, responsibility, and accountability are well defined. The Board reviews compliance reports of all laws applicable to the Company, as well as steps taken by the Company to rectify instances of non-compliances, if any.
The Board meets at regular intervals and during the year, six meetings of the Board of Directors were held on November 24, 2014, February 12, 2015, March 28, 2015, April 23, 2015, May 14, 2015 and August 14, 2015. The gap between no two board meetings exceeded one hundred and twenty days. All the members of the Board were provided requisite information as required as per Listing Agreement well before the Board Meeting. The Directors of the Company are not related inter-se.
D. INDEPENDENT DIRECTORS MEETING
During the year under review the Independent Directors had one meeting without the presence of Non- Independent Directors and members of the Management. At this meeting, the Independent Directors inter alia evaluated the performance of the Non-Independent Directors and the Board of Directors as a whole, evaluated the performance of the Chairman of the Board and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board.
E. PERFORMANCE EVALUATION OF INDEPENDENT DIRECTORS
The performance of Independent Directors was evaluated by Board of Directors on the basis of policy as laid down by the Nomination and Remuneration Committee.
F. CODE OF CONDUCT
The Code of Business Conduct and Ethics for Directors/Management Personnel ('the Code'), as adopted by the Board, is a comprehensive Code applicable to Directors and Management Personnel. The Code, while laying down in detail, the standards of business conduct, ethics and governance centers around the following theme:
The Company's Board and Management Personnel are responsible for, and are committed to, setting the standards of conduct contained in this Code and for updating these standards, as appropriate, to ensure their continuing relevance, effectiveness and responsiveness to the needs of local and international investors and other stakeholders as also to reflect corporate, legal and regulatory developments. This Code should be adhered to in letter and in spirit'.
A copy of the Code has been put on the Company's website (www.amtek.com <) The Code has been circulated to Directors and Management Personnel, and its compliance is affirmed by them annually.
A declaration signed by the CEO/CFO is published in this Report.
G. WHISTLE BLOWER POLICY
The Audit Committee has established a Vigil, which provides a formal mechanism for all Directors and employees of the Company to approach the Management of the Company (Audit Committee in case where the concern involves the Senior Management) and make protective disclosures to the Management about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. The Company affirms that no director or employee of the Company has been denied access to the Audit Committee.
III) BOARD COMMITTEES
The Board has constituted a set of Committees with specific terms of reference/scope to focus effectively on the issues and ensure expedient resolution of diverse matters. The Committees operate as empowered agents of the Board as per their terms of reference. Targets set by them as agreed with the management are reviewed periodically and mid-course corrections are also carried out. The Board of Directors and the Committees also take decisions by circular resolutions which are noted at the next meeting. The minutes of the meetings of all Committees of the Board are placed before the Board for discussions. The Committees and the Senior Management functions as on September 30, 2015 is illustrated below:-
HUMAN RESOURCES, NOMINATION AND REMUNERATION COMMITTEE
STAKEHOLDERS RELATIONSHIP COMMITTEE
RISK MANAGEMENT COMMITTEE
SHARE TRANSFER COMMITTEE
SEXUAL HARASSMENT COMMITTEE
1. AUDIT COMMITTEE
A. QUALIFIED AND INDEPENDENT AUDIT COMMITTEE
The Board of the Company has constituted Audit Committee, comprising of three directors. All the members of the committee viz. Mr. B. Lugani (Chairman), Mr. S.E. Krishnan and Mr. Sanjiv Bhasin are independent and non-executives. The Company Secretary acts as the Secretary of the Audit Committee.
The constitution of the Audit Committee meets the requirement of Section 177 of the Companies Act, 2013 and the Listing Agreement. The power and role of the Audit Committee is as per the guidelines set out in the Listing Agreement and as prescribed under Section 177 of the Companies Act, 2013.
B. MEETING OF AUDIT COMMITTEE
During the period, the committee met Four (4) times and all the members were present in all the meetings. Apart from the members of the Committee, the Audit Committee meetings were attended by the CFO & Senior Manager (Finance). Company Secretary attended the meetings as the Secretary to the Committee.
C. POWERS OF AUDIT COMMITTEE
The Audit Committee shall have powers, which should include the following:
• To investigate any activity within its terms of reference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if it considers necessary.
D. ROLE OF AUDIT COMMITTEE
The role of Audit Committee shall include the following (including the terms of reference):
• 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;
• Reviewing with the management, the quarterly financial statements before submission to the Board for approval;
• 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 utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
• Reviewing and monitoring the auditors independence and performance and effectiveness of audit process.
E. REVIEW OF INFORMATION BY AUDIT COMMITTEE
The Audit Committee shall mandatorily review the following information:
• Management discussion and analysis of financial condition and results of operations;
• Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
• Management letters / letters of internal control weaknesses issued by the statutory auditors;
• Internal audit reports relating to internal control weaknesses; and
• The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.
2. HUMAN RESOURCES, NOMINATION AND REMUNERATION COMMITTEE
The Board has constituted a Remuneration Committee, thereby known as Human Resources, Nomination and Remuneration Committee (HRNR Committee) comprising three non executive directors viz. Mr. B. Lugani (Chairman), Mr. Sanjiv Bhasin and Mr. Vivek Kumar Agarwal. The Committee has been constituted to rationalise all employees' related issues, while adhering to the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended from time to time.
Terms of Reference of the Committee, inter alia, includes the following:
i) Formulate the criteria for determining qualifications, positive attributes and independence of a director.
ii) Recommend to the Board a policy relating to the remuneration for the directors (including specific remuneration packages for Executive Directors including pension rights and any compensation payment), Key Managerial Personnel and other employees. While formulating the policy, it shall ensure 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;
• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
• Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
iii) Identify persons who are qualified to become directors (including independent 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.
iv) Whilst recommending appointment of Executive Directors, a balance between functional and business unit representatives may be considered.
v) Carry out evaluation of every director's performance including review of remuneration of CEOs of certain significant subsidiaries.
vi) Take steps to refresh the composition of the Board from time to time.
During the period under review, only one (1) meeting of the Remuneration Committee was held, in which all the members were present.
The Company's remuneration policy is directed towards rewarding performance, based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice. The remuneration of the Key Managerial Personnel and Senior Management Personnel's of the Company is reviewed and recommended by Committee, based on criteria such as industry benchmarks, the Company's performance vis-a-vis the industry, responsibilities shouldered, performance/track record, macro-economic review on remuneration packages of heads of other organizations. The Company pays remuneration by way of salary, perquisites and allowances (fixed component), incentive remuneration. Annual increments are decided by the Remuneration Committee within the salary scale approved by the Members.
A sitting fee of Rs. 25000/- for attendance at each meeting of the Board meeting be paid to all the Independent.
The sitting fees paid/payable to the Non-Whole-time directors is excluded whilst calculating the limits of remuneration in accordance with Section 197 of the Act. The Company also reimburses out-of-pocket expenses to Directors attending meetings held at a city other than the one in which the Directors reside.
Remuneration of employees largely consists of basic remuneration, perquisites, allowances and performance incentives. The components of the total remuneration vary for different employee grades and are governed by industry patterns, qualifications and experience of the employee, responsibilities handled by them, their individual performances, etc. The annual variable pay of senior managers is linked to the Company's performance in general and their individual performance for the relevant year is measured against specific major performance areas which are closely aligned to the Company's objectives.
The Company does not have any Employee Stock Option Scheme.
3. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted the Stakeholders' Relationship Committee comprising of three directors under the Chairmanship of Mr. S.E Krishnan (Chairman). The other members in the committee being Mr. D.S. Malik and Mr. B Lugani. The Board has constituted Stakeholders Relationship Committee in accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement..
The Company has also adopted code of internal procedures and conduct for prevention of insider trading in the shares of the Company, pursuant to Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended. The Board has designated Company Secretary as the Compliance Officer for this purpose and has authorized this committee to monitor the compliances as required under the aforesaid Regulation.
Terms of Reference of the Committee, inter alia, includes the following:
• Oversee and review all matters connected with the transfer of the Company's securities
• Approve issue of the Company's duplicate share / debenture certificates
• Monitor redressal of investors' / shareholders' / security holders' grievances
• Oversee the performance of the Company's Registrars and Transfer Agents
• Recommend methods to upgrade the standard of services to investors
• Monitor implementation of the Company's Code of Conduct for Prohibition of Insider Trading
• Carry out any other function as is referred by the Board from time to time or enforced by any statutory notification/amendment or modification as may be applicable.
During the period, the committee met four times. All the members were present in all the meetings held during the period.
4. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The Company proactively reviews its governance practices and standards inter alia considering best practices and regulatory developments. During the year under review, the Board in terms of Section 135 of the Companies Act, 2013 and the Listing Agreement has constituted a Corporate Social Responsibility Committee is primarily responsible for formulating and monitoring the implementation of the framework of corporate social responsibility policy, other policies under Business Responsibility Policy Manual and to look into sustainability matters and matters related to overall governance.
The members of Corporate Social Responsibility Committee are Mr. B. Lugani, Chairman Mr. S. E. Krishnan and Mr. Vivek Kumar Agarwal.
A. TERMS OF REFERENCE OF THE COMMITTEE, INTER ALIA, INCLUDES THE FOLLOWING:
• To formulate and recommend to the Board, a Corporate Social Responsibility (CSR) Policy indicating activities to be undertaken by the Company in compliance with provisions of the Companies Act, 2013 and rules made there under;
• To recommend the amount of expenditure to be incurred on the CSR activities;
• To monitor the implementation of the framework of the CSR Policy;
• To oversee the implementation of polices.
5. FINANCE COMMITTEE
The Board of Directors has constituted Finance Committee comprising of Mr. Arvind Dham (Chairman), and Mr. D.S Malik, Mr. Gautam Malhotra, are other members of the Committee
A) TERMS OF REFERENCE OF THE COMMITTEE, INTER ALIA, INCLUDES THE FOLLOWING:
• Review the Company's financial policies, risk assessment and minimization procedures, strategies and capital structure, working capital and cash flow management, and make such reports and recommendations to the Board with respect thereto, as it may deem advisable ;
• Review banking arrangements and cash management;
• Exercise all powers to borrow money (otherwise than by issue of debentures) within limits approved by the Board, and take necessary actions connected therewith, including refinancing for optimization of borrowing costs ;
• Give guarantees/issue letters of comfort/providing securities within the limits approved by the Board;
• Borrow money by way of loan and/or issue and allot bonds/notes denominated in one or more foreign currencies in international markets for the purpose of refinancing the existing debt, capital expenditure, general corporate purposes, including working capital requirements and possible strategic investments within limits approved by the Board ;
• 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 ;
• Other transactions or financial issues that the Board may desire to have them reviewed by the Finance Committee ;
• Delegate authorities from time to time to the executives/ authorised persons to implement the Committee's decisions ;
• Review regularly and make recommendations about changes to the charter of the Committee.
6. RISK MANAGEMENT COMMITTEE
The Board of Directors has constituted Risk Management Committee comprising of following directors:-
1. Mr. Arvind Dham - Chairman
2. Mr. B. Lugani - Member
3. Mr. Gautam Malhotra - Member
The purpose of the committee is to assist the board in fulfilling its corporate governance duties by overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and environmental risks. The committee has the overall responsibility of monitoring and approving the risk policies and associated practices of the Company. The risk management committee is also responsible for reviewing and approving the risk disclosure statements in any public documents or disclosure.
7. SHARE TRANSFER COMMITTEE
The Board has delegated the powers to approve transfer of the Shares to Share Transfer Committee. During the period, committee met four times and approved transfer of the shares lodged with the Company. The Committee deals with the following matters:-
• Transfer/transmission of shares;
• Issue of new share certificates/duplicate share certificates;
• Review of de - materialization of shares; and
• all other matters relating to shares.
8. SEXUAL HARASSMENT COMMITTEE
As per the requirement of Prevention of Sexual Harassment Act, 2013, Company has duly constituted Sexual Harassment Committee, comprising of the following members:-
Ms. Anuradha Kapoor - Presiding Officer
Mr. Rajesh Soni - HR Department
Ms. Sonal Choudhary - HR Department
Ms. Swati Ahuja - Company Secretary
Company is totally committed in providing an environment that is free from discrimination and harassment. We recognize the rights of our employees and provide forums, support groups and policies to hear and address their issues, concerns and resolve them in a fair and transparent manner. Our Sexual Harassment Committee members help employees express their grievances and address them in a fair and objective manner. The cases are patiently heard and resolved by a unbiased group. We have a whistle blower policy as well that assures complete anonymity and confidentiality of information to the reporting individual.
IV) SUBSIDIARY COMPANIES
The Company does not have any subsidiary Company.
V) RELATED PARTY TRANSACTIONS
The Company usually enters into the transactions with its related parties. The Policy for Related Party Transactions is also adopted by the Board and the same is available at the Company's website (www.amtek.com <http://www.amtek.com>)
• RELATED PARTY TRANSACTIONS
Details of related party transactions entered into by the Company are included in the Notes to Accounts. Material individual transactions with related parties are in the normal course of business on an arm's length basis and do not have potential conflict with the interests of the Company at large. Transactions with related parties entered into by the Company in the normal course of business are placed before the Audit Committee.
• DETAILS OF NON-COMPLIANCE BY THE COMPANY
There were no instances of non-compliance by the Company and no penalties, or strictures were imposed on the Company by Stock exchanges or SEBI or any statutory authority on any matter related to capital markets during the last three years.
• DISCLOSURE OF ACCOUNTING TREATMENT
In the preparation of financial statements for the period ended on 30th September, 2015; there was no treatment different from that prescribed in an accounting standard that had been followed.
As part of the Directors' Report or as an addition thereto, a Management Discussion and Analysis Report forms as part of the Annual Report to the shareholders. This Management Discussion & Analysis include discussion on the following matters within the limits set by the company's competitive position:
a. Industry structure and developments.
b. Opportunities and Threats.
c. Segment-wise or product-wise performance.
e. Risks and concerns.
f. Internal control systems and their adequacy.
g. Discussion on financial performance with respect to operational performance.
h. Material developments in Human Resources / Industrial Relations front, including number of People employed.
The Code of Conduct for the Board of Directors and the senior management have been disclosed on the website of the Company.
/ Quarterly results and presentations made by the company to analysts/investors have been uploaded on company's web-site (www.amtek.com).
/ Stakeholders Relationship Committee (formerly known as Shareholders Grievances Committee) has already been constituted.
/ To expedite the process of share transfers, the Board of the company has already constituted the Share Transfers Committee.
• DISCLOSURE IN THE ANNUAL REPORT
The details of the establishment of vigil mechanism will be disclosed on its website (www.amtek.com).
The Company have already disclosed the remuneration policy and evaluation criteria in this annual report.
• PROCEEDS FROM PUBLIC ISSUES, RIGHTS ISSUES, PREFERENTIAL ISSUES
During the year under review, the Company issued and allotted 1342280 preference shares at face value of Rs.10/- each and premium of Rs. 288/- per share on preferential basis.
• DETAILS OF COMPLIANCE WITH MANDATORY REQUIREMENTS AND ADOPTION OF NON
MANDATORY REQUIREMENTS MANDATORY REQUIREMENTS
The Company is fully compliant with the applicable mandatory requirements of Clause 49 of the Listing Agreement.
VIII) MEANS OF COMMUNICATION
Results for quarter ended 31st December 2014, 31st March 2015, 30th June 2015 and 30th September 2015 have been published in English and Hindi newspapers (viz Business Standard and Kesari).
The Company also uploads its financial results, shareholding pattern and other information on the website of the Company i.e. www.amtek.com The Shareholding Pattern, Corporate Governance Report, Financial Results and Corporate Announcements are filed electronically on NSE Electronic Application Processing System (NEAPS) & BSE online portal - BSE Corporate Compliance & Listing Centre.
A Management Discussion and Analysis Report which forms part of the Annual Report is given by means of a separate annexure and is attached to the Directors' Report.
IX) GENERAL MEMBERS INFORMATION • ANNUAL GENERAL MEETING
Date : December 29, 2015
Day : Tuesday
Time & Venue : 9.30 A.M, Gat No.614, At Village Kuruli Tal.: Khed Distt. Pune-410 501
• FINANCIAL CALENDER FOR F.Y.- 2015-16
Financial year : October 1, 2015 to March 31, 2016
First Quarter Results : Mid February, 2016
Second Quarter Results : May, 2016
• DATE OF BOOK CLOSURE
Saturday, 26 December, 2015 (Both days inclusive) Tuesday, 29 December, 2015
• LISTING ON STOCK EXCHANGES
The Shares of the Company are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Listing fees for the year 2015-2016 has been paid to the Stock Exchanges with in the stipulated time.
• STOCK CODES
Bombay Stock Exchange Limited : 513335
National Stock Exchange of India Limited : METALFORGE
ISIN NO. FOR DEMATERIALIZED SHARES : INE 425A01011
• REGISTRAR AND SHARE TRANSFER AGENTS
Beetal Financial & Computer Services Private Limited
BEETAL HOUSE, 3rd Floor, 99, Madangir, B/h. L.S.C New Delhi-110006 Phone No. : 011-29961281-8283 Fax No. : 011-29961284
• DEMATERIALISATION OF SHARES AND LIQUIDITY:
The dematerialisation facility exists with both the NSDL and CDSL for the convenience of shareholders. As on 30th September, 2015, 36102555 equity shares representing 98.24 % of Subscribed and Paid Up Capital have been de-materialized.
• OUTSTANDING GDRS/ADRS/ WARRANTS/ OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION
DATE AND LIKELY IMPACT ON EQUITY
During the period under review, the Company has not converted any warrants into equivalent number of equity shares. As on date, there are no outstanding GDRs/ADRs/Warrants/ or any other Convertible instruments.
• PLANT LOCATION
Unit l - MIDC Area, Ahmednagar
Unit ll - Chakan, Dist.Pune
Unit III - Kuruli, Dist.Pune
Unit IV - Nalagarh, Distt.Solan, Himachal Pradesh
Unit V - MIDC Area, Aurangabad
• INVESTORS CORRESPONDENCE MAY BE ADDRESSED TO :-
Ms. Swati Ahuja, AGM AGM (Legal & Company Secretary) Bhanot Apartment, 4, Local Shopping Centre, Pushp Vihar, New Delhi - 110 062. Ph.: 011- 41649800 Fax: 011-29054554 E-mail Id:email@example.com
By Order of the Board
For METALYST FORGINGS LIMITED
Sd/- (SANJIV BHASIN)
DIN NO: 01119788
Place : New Delhi
Date : 28.11.2015