REPORT ON CORPORATE GOVERNANCE
In compliance with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company sets forth the report on the Corporate Governance on the matters as mentioned in the said schedule and practices followed by the Company.
1. Company’s philosophy on the Code of Governance
The Company aims at maintaining, transparency, accountability and equity in all facets of its operations on a continuous basis and in all interactions with the Stakeholders, including the Shareholders, employees, government, lenders and other constituents while fulfilling the role of a responsible corporate representative committed to good corporate practices. The Company is committed to maintain the high standards of Corporate Governance on a continuous basis by laying emphasis on Ethical Corporate Citizenship and establishment of transparent Corporate Cultures which aim at true Corporate Governance. The Corporate Governance process and systems have been gradually strengthened over the years.
The Company believes that all its operations and actions must result in enhancing the overall shareholder value in terms of maximization of shareholder’s benefits, among others, over a sustained period of time.
2. Board of Directors
The Company’s Board of Directors comprised a judicious mix of Fourteen Directors consisting of five Executive Directors, four Non- Executive Directors and five Independent Directors and one of whom is a Woman Director as stipulated under the Companies Act, 2013 / and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The following table gives the composition of the Company’s Board, category, number of Board Meetings held during the year, attendance of each Director at the Board Meeting and at the last Annual General Meeting and other Directorships, Memberships and Chairmanships of Committees held by each of the Director during the Financial Year. The Company is compliant with all the Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Companies Act, 2013 and the rules made there under relating to appointment of Directors
The Company convened minimum one Board Meeting in each quarter as required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Company ensured the gap between two Board Meetings has not exceeded One Hundred and Twenty Days.
The Promoter Directors namely Sri A. A. V. Ranga Raju, Sri A. S. N. Raju, Sri A. G. K. Raju, Sri N. R. Alluri and Sri A. V. N. Raju, are related to each other in terms of the definition of “Relative” under Section 2(77) of the Companies Act, 2013 and Rules framed there under. The aforementioned Promoter Directors are not related to the other Board members
A training programme was organized for the Board Members and particularly for Independent Directors on April 22, 2015 at the Corporate office of the Company. Presentations were made by experts in Corporate Laws and the Construction & Infrastructure Industry who had briefed the Members of the Board regarding the changes in the Corporate Laws and the developments in the Construction and Infrastructure Industry. Details of the familiarization programmes are hosted on http://ncclimited.com/corporate_governance.html
Information supplied to the Board
As a policy measure, all the major decisions which involve new investments and capital expenditure, in addition to the matters which statutorily require Board approval, are put up for consideration of the Board, Inter-alia, the following information is regularly provided to the Board as part of the agenda papers well in advance of the Board meetings or is tabled at the Board Meeting
o Annual operating plans, budgets & any updates.
o Capital budgets and any updates.
o Quarterly results of the Company and performance of the divisions.
o Minutes of the meetings of the Audit Committee and other Committees of the Board of the Directors.
o The information on recruitment and remuneration of senior officers just below the level of Board of Directors including appointment or removal of Chief Financial Officer and the Company Secretary.
o Show cause, demand, prosecution notices and penalty notices which are materially important.
o Fatal or serious accidents, dangerous occurrences, any material effluent or pollution matters.
o Any material default in financial obligations to and by the Company, or substantial non-payment by clients.
o Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order which may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.
o Details of any joint venture or collaboration agreement.
o Significant labour problems and their proposed solutions. Any significant development in Human Resources.
o Sale of investments, subsidiaries, assets which are material in nature and not in normal course of business.
o Quarterly details of foreign exchange exposures and steps taken by management to limit the risks of adverse exchange rate movement, if material,
o Non-compliance with any regulatory, statutory or listing requirement and shareholders service such as non-payment of dividend, delay in share transfer, among others.
Code of Conduct
The Board of Directors of the Company laid a Code of Conduct for Directors and senior management personnel. The Code of Conduct is posted on the Company’s web-site www.ncclimited.com. All Directors and designated personnel in the senior management affirmed compliance with the Code for the year under review. The declaration to this effect, signed by Sri A A V Ranga Raju, Managing Director is annexed to this report.
As on March 31, 2016 the Company has Seven Board level Committees, inter alia the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee, the Performance Review Committee and the Corporate Governance Committee.
3. Audit Committee of the Board
The Audit Committee presently comprises four Non-Executive Directors, of which three are Independent Directors. The members of the Committee are financially literate and bring in expertise in the fields of Finance, Strategy, Banking, Energy and Management.
Sri R. V. Shastri, Chairperson of the Committee is an Independent Director and has accounting and financial management expertise.
The Audit Committee met four times during the Financial year i.e. on May 14, 2015, July 29, 2015, November 9, 2015 and February 10, 2016. The Company is in compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 in terms of time gap between any two Audit Committee Meetings. Sri R.V. Shastri, Chairperson of the Committee was present at the last Annual General Meeting of the Company held on August 24, 2015.
Terms of reference of the Audit Committee
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. Recommendation for appointment, remuneration and terms of appointment of the Statutory and the Internal Auditors of the company;
3. Approval of payment to Statutory Auditors for any other services rendered by the statutory auditors;
4. Reviewing, with the Management, the annual financial statements and Auditor’s Report thereon 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 (c) of sub-section 3 of section 134 of the Companies Act, 2013.
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. Modified opinions in the draft Audit Report.
5. Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval;
6. 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 utilized 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;
7. Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the Company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the Management, performance of statutory and internal auditors, adequacy of the internal control systems;
13. 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;
14. Discussion with internal auditors of any significant findings and follow up there on;
15. 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;
16. 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;
17. To look into the reasons for substantial defaults if any in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
18. To review the functioning of the Whistle Blower mechanism;
19. Approval of appointment of Chief Financial Officer (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Company Secretary is the Secretary to the Audit Committee.
4. Nomination and Remuneration Committee
The Committee comprises of four Non-Executive Directors, of which two are Independent Directors. Smt Renu Challu, an Independent Director is the Chairperson of the Committee and Sri Hemanth M Nerurkar Independent Director and Sri Amit Dixit and Sri Utpal Sheth Non-Executive and non Independent Directors are the other members of the Committee. The Committee met two times during the Financial Year on May 28, 2015, and November 10, 2015.
Terms of reference of the Nomination Committee
(1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board of Directors a policy relating to the remuneration of the directors, key managerial personnel and other employees;
(2) formulation of criteria for evaluation of performance of Independent Directors and the Board of Directors;
(3) devising policy on diversity of Board of Directors.
(4) 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 of Directors their appointment and removal.
(5) Whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors
Meeting of Independent Directors:
Pursuant to The Companies Act, 2013 read with rules made there under and Secretarial Standard-I issued by the Institute of Company Secretaries of India and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of the Independent Directors of the Company for the calendar year 2015 was held on 11th February, 2015 and the next meeting of the Independent Directors will be held in the calendar year 2016.
Board Level Performance Evaluation
Pursuant to The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, annual performance evaluation of the Directors including Chairperson, Board and its Committees viz.,the Audit Committee, Nomination and Remuneration Committee, and Stakeholders Relationship Committee has been carried out.
The Performance evaluation of Independent Directors was carried out by the entire board of directors without participation of the directors who are subject to the evaluation.
6. Stakeholders Relationship Committee:
The Committee primarily focuses on Shareholder grievances, interalia, redressal of Investor complaints, attending Investor requests, approving the issue of duplicate Share Certificates and overseeing and review all matters connected with servicing of investors. The Committee oversees the performance of the Registrar and Transfer Agents and recommends measures for overall quality improvement of investor services. The Chairperson of the Committee Sri R V Shastri is an Independent Director and the Company Secretary is the Secretary of the Committee. Sri M.V. Srinivasa Murthy, Company Secretary and EVP (Legal) was designated as the Compliance Officer. As on March 31, 2016 the Committee comprises three Directors
viz., Sri R. V. Shastri (Chairperson of the Committee), Smt. Renu Challu and Sri A. G. K. Raju as its members During the Financial Year 2015-16, the Company has received 153 requests from the shareholders/investors. All the requests were promptly attended to and there were no un-resolved shareholder requests were pending as on March 31, 2016. The Company has processed and approved all valid requests received for transfer and dematerialization of Shares and there were no pending requests as on March 31, 2016. The Company designated a separate email id for investor grievances reachable at email@example.com.
During the year no resolution was passed through postal ballot. None of the business which is proposed to be transacted at the ensuing Annual General Meeting requires passing of a resolution through Postal Ballot process.
8. Means of Communication
The Company was having 83372 shareholders as on March 31, 2016. The main channel of communication to the shareholders is through the annual report which inter alia includes the statement of Chairman Emeritus, the Directors Report, Report on Corporate Governance,
Management Discussion and Analysis Report, the Standalone and Consolidated Financial Statements along with the Auditor’s Report thereon, the Secretarial Audit Report, Special Initiatives and Shareholders Information.
The Annual General Meeting (AGM) is the principal forum for interaction with the Shareholders, where the Board answers queries raised by the Shareholders. The Board acknowledges its responsibility towards its Shareholders and encourages open and active dialogue with all its Members and Stake Holders.
The Company communicates with its Institutional Shareholders through meetings with Analysts. The presentations made to the Analysts are uploaded on the Company’s website www.ncclimited.com.
Regular communication with shareholders ensures that the Company’s strategy is being clearly understood. Details relating to quarterly performance and financial results are disseminated to the shareholders through press releases and are also uploaded on the Company’ website.
The Quarterly Results of the Company are published in newspapers such as Business Standard /Financial Express or Andhra Prabha / Eenadu (regional language), along with the official press releases.
9. General shareholders’ information
(a) Day, date and time of 26th Annual General Meeting
26th Annual General Meeting of Members of the Company is scheduled to be held on Wednesday the 24th day of August, 2016 at 3.30 p.m at K L N Prasad, Auditorium, The Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry, Federation House, FAPCCI Marg, Red Hills, Hyderabad - 500 004.
(b) Financial calendar (Tentative) for the Financial Year 2016-17.
Results for quarter ending June 30, 2016 August 10, 2016
Results for quarter ending September 30, 2016 November 09, 2016
Results for quarter ending December 31, 2016 February 10, 2017
Results for year ending March 31, 2017 May 23, 2017
Dates of Book closure : August 10, 2016 to August 12, 2016 (both days inclusive) for payment of dividend.
(c) Dividend payment date: (subject to approval of shareholders at AGM) on or after August 29, 2016.
(d) The Company’s Equity Shares are listed on the BSE Ltd and the National Stock Exchange of India Limited.
BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai- 400001
National Stock Exchange of India Ltd., Exchange Plaza, C-1, Block G, Bandra Kurla Complex,Bandra (E) Mumbai – 400 051
Listing fee for the financial year 2016-17 has been paid to the stock exchanges.
(e) Stock codes Equity shares
BSE Limited (BSE) : 500294 / National Stock Exchange of India Limited (NSE) : NCC
(g) Registrar and Transfer Agents :
M/s. Karvy Computershare Pvt. Ltd
Karvy Selenium Tower B, Plot No.31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad -500 032 Phone:040-67161500 Fax:040-23420814 Email: firstname.lastname@example.org www.karvycomputershare.com
(h) Share Transfer System
The share transfers which are received in physical form are processed and the share certificates are returned within a period of 10 to 15 days from the date of receipt, subject to the documents being found valid and complete in all respects. The Company appointed
M/s. Karvy Computershare Pvt. Ltd as common Registrar and Transfer Agents for dealing with all the activities connected with both physical and demat segments pertaining to the Securities of the Company
(k) GDR & their impact on equity shares
As on March 31, 2016, there were 757,810 GDRs pending for conversion. The overseas depository is Deutsche Bank Trust Company Americas, 60 Wall Street New York NY 10005, USA and the Custodian is ICICI Bank Ltd, Securities Processing Division, North Tower, 2nd Floor, ICICI Towers, Bandra Kurla Complex, Mumbai - 400051, India.
The Company’s GDRs are listed on the Luxembourg Stock Exchange.
(l) International Securities Identification Number (ISIN): INE868B01028
(m) Address for correspondence Physical/Electronic mode
M/s. Karvy Computershare Pvt. Ltd Karvy Selenium Tower B, Plot No.31 & 32 Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad -500 032 Phone:040-67161500 Fax:040-23420814 Email: email@example.com www.karvycomputershare.com
Shareholders general correspondence Company Secretary
NCC Limited NCC House, 9th Floor, Madhapur, Hyderabad - 500 081 Phone : 040-23268888 Fax : 040- 23125555 E-Mail : firstname.lastname@example.org www.ncclimited.com ECS Facility;
The Company is providing facility of “Electronic Clearing Service” (ECS) for payment of dividend to shareholders who are requested to provide details of their bank account for availing ECS facility. Further, ECS facility is available to the beneficial owners of shares held in electronic form as well as in physical form. Those desirous of availing the ECS facility may provide their mandate to the Company in writing, can be obtained from the Company’s Registrar and Transfer Agents M/s. Karvy Computershare Pvt. Ltd.,.
In terms of Sections 205A and 205C of the Companies Act, 1956, (corresponding section of Companies Act, 2013, not notified) the Company is required to transfer the amount of dividend remaining unclaimed for a period of seven years from the date of transfer to the unclaimed dividend account to the Investor Education and Protection Fund (IEPF).Shareholders are requested to ensure that they claim the dividend(s) from the Company before transfer to the Investor Education and Protection Fund. In compliance with Sections 205A(6) & 205A(7) of the Companies Act, 1956, during the F.Y 2015-16, the Company transferred the unclaimed dividend amounting to Rs. 926,768 (Final Dividend) pertaining to the year 2007-2008 to the Investor Education and Protection Fund.
10. Other Disclosures
(a) During 2015 -16 certain transactions were entered into with related parties. The details thereof are given in note number 32 of the Financial Statements.
(b) There were no occasions of non-compliance by the Company and no penalties or strictures were imposed on the Company by the stock exchanges or the SEBI or any statutory authority, on any matter related to Capital markets, during the last three years.
(c ) The Company has formulated and adopted formal Whistle Blower Policy/vigil mechanisam and the same is hosted on the Company’s Web site and no concerned person has been denied access to the Audit Committee.
(d) The Company has complied with all the mandatory requirements of Schedule V of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.
(e) Material Subsidiary policy is hosted in our website www.ncclimited.com
The following is the weblink: http://ncclimited.com/images/PDF/Policies/Policy-material-subsidiary_NCC_Ltd.pdf
(f) Related party transaction policy is hosted in our website www.ncclimited.com, the following is the link; http://ncclimited.com/ images/PDF/Policies/Related%20Party%20Transactions-%20NCC.pdf
During the year, there was no treatment of any transaction different from that as prescribed in the Accounting Standards as required under Section 133 of the Companies Act, 2013.
A report on risk management forms a part of the Management Discussion and Analysis in this Annual Report.
This Annual Report has a detailed section on Management Discussion and Analysis.
The information on appointment/ re-appointment of Directors and their brief profiles forms part of the Notice of the ensuing Annual General Meeting for the information of shareholders.
11. The Company has complied with all the requirements of Corporate Governance Report as set out in paras (2) to (10) above.
12. Non-mandatory requirements /Discretionary Requirements as stipulated in Regulation 27 (1) read with Part E of the Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(a) The Company’s financial statements are with unmodified audit opinion.
(b) The Company has appointed separate persons to the post of Chairman and Managing Director.
(c) The Internal auditors of the Company report directly to the Audit Committee of the Board.
13. The Company has complied with all the mandatory clauses of the erstwhile Clause 49 of the Listing Agreement as applicable till
November 30, 2015 and corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation
(2) of the regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from the date of its applicability.
14. Disclosures with respect to demat suspense account/unclaimed suspense account:
The Company has followed the due procedure as provided in the Regulation 39 (4) read with Schedule V & VI of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 in dealing with the unclaimed shares in Public issue/Rights issues. The movement of un-claimed shares in the “NCC Ltd – Unclaimed Suspense Account” during the year as follows:-