REPORT ON CORPORATE GOVERNANCE
(In compliance with Clause 49 of the Listing Agreement)
1) Company's philosophy on Corporate Governance
The Company's philosophy on Corporate Governance is to conform to the code of corporate governance in letter and spirit as an aid to efficient conduct of its business and in meeting its obligations to shareholders.
2) Board of Directors:
a) Constitution & Size of the Board
During the year under review, your Board of Directors had 11 Directors, 3 being Executive Directors and 8 Non-Executive Directors (including a Nominee Director). Three of them being Independent Directors. The Chairman of the Board is an Independent Director. 4 of the total number of 11 directors on the Board were independent, and the Company was in compliance of the provision relating to the number of Independent Directors prescribed under the Companies Act and the listing agreement. However, after the Nominee Director ceased to be treated as independent, there was a shortfall of one in the number of Independent Directors, which was subsequently filled, upon the induction of two more independent directors on 11th August, 2015.
At the Board meeting held on 30th May,2015, Mr.N.V.Suvarna has been appointed as additional Director and Executive Director w.e.f 30th May,2015.
Mr.P.N.Raju, resigned as Executive Director of the company w.e.f 2nd July ,2015 and continue to be a Non Executive Director.
Upon appointment of Ms. Roopa Bhupatiraju as Director on 30th May 2014, the Company has complied with the provision relating to the appointment of a Woman Director,
d) Criteria for performance evaluation of Independent Directors
The Nomination &Remuneration Committee has laid down the evaluation criteria for performance evaluation of Independent Directors and other Non Executive Directors of the company. No formal separate meeting of the independent Directors was held during the year under review . However, independent directors keep meeting separately on an informal basis to discuss the affairs of the company.
A formal meeting of the Independent Directors was held on 11th August, 2015. The views of the Independent Directors were conveyed to the other directors.
e) Familiarization programme for Independent Directors
All the present Independent Directors are already familiar with the company, its operations and policies and also their rights and responsibilities. For new inductees, the familiarization process consists of plant visits, interaction with the executive directors, other members of the Board and senior management personnel. The company also is willing to sponsor independent directors to training programmes and seminars on their rights and responsibilities, whenever there is a need and an opportunity.
3) Audit Committee:
The Board has an Audit Committee constituted pursuant to Clause 49 of the Listing Agreement. The role of the Audit Committee includes the following:
a) Overseeing 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 to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
c) Reviewing, with the management, the annual financial statements before submission to the board for approval
d) Reviewing the adequacy of internal audit function and the adequacy of the internal control systems.
e) Framing and reviewing policy on related Party transactions and recommend the same to Board. The Committee is empowered with the powers as prescribed under Clause 49 of Listing Agreement and Section 177 of the Companies Act, 2013.
During the year under review, five meetings of the audit committee were held on the following dates 30th May, 2014, 14th August, 2014, 14th November 2014, 27th December,2014 and 31st January 2015.
In the constitution of the Audit Committee, the proportion of independent and non independent directors was 3:1. However, with the nominee director of IREDA, ceasing to be treated as independent, the number proportion was reduced to 2:2. The Company had the option of dropping the IREDA nominee from the Committee, to achieve the prescribed proportion. However considering that the nominee director is a senior chartered accountant, the company felt that retaining him on the Committee would serve objective of corporate governance better, though the option of dropping him from the Committee would have resulted in full compliance with the provisions relating to constitution of Audit Committee.
The Managing Director, Executive Directors and the President &CFO are permanent invitees to this Committee. The terms of reference of the Audit Committee are in accordance with the provisions of Clause 49 of the Listing Agreement.
There were no occasions where the Board did not accept any recommendation of the Audit Committee.
The remuneration policy of the Company is to make the compensation payable to the Executive Directors comparable to industry standards and commensurate with the performance of the Company, while adhering to the ceilings prescribed under the Statute.
The Nomination and Remuneration Committee has adopted a Nomination and Remuneration Policy which, inter alia, deals with the manner of selection of Board of Directors, Key Managerial Personnel and other employees and their remuneration.
The remuneration/ compensation/ commission etc, to Directors and KMP are determined by the Nomination and Remuneration Committee and recommended to the Board for approval. Such remuneration/ compensation/ commission etc., are subject to the prior/post approval of the shareholders of the Company and CentralGovernment, wherever required.
Remuneration paid to Non Executive Directors
The Non-Executive Directors were paid sitting fees for attending the meetings of the Board or the Committees thereof at the rate of Rs.7500/- per Board/Committee Meeting. In addition they are entitled to commission at the rate of not exceeding 1% of the net profits of the Company in terms of the resolution approved by the shareholders at the AGM held on 29th September, 2009. During the year under review, in view of inadequacy of profits, they have not been paid any commission
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
In view of the losses in the previous years, your company is not covered by the provisions relating to Corporate Social Responsibility during the year under review. However, the Board at its meeting held on August, 14 2014, constituted the CSR committee comprising Mr.Kamlesh Gandhi-Chairman), Mr. K.Gautam (Executive Director), and Mr.Vinodrai.V.Goradia(Director) as members.
This Committee will discharge the functions as envisaged by the Act as and when it becomes applicable. When the company is not covered, the Committee will review the voluntary CSR activities of the company.
There are no subsidiaries of the Company.
a) The related party transactions made by the Company with its Promoters, Directors, Management or Relatives are disclosed in the Notes to the Account. There have been no related party transactions that may have conflict with the interest of the Company at large.
b) During the last three years there were no strictures or penalties imposed by either the SEBI or the Stock Exchanges or any statutory authority for non-compliance of any matter related to the capital markets.
c) The Company formulated a formal whistle blower policy, which was adopted by the Board at its meeting held on 30 May 2015.
d) The Company has complied with the mandatory requirements stipulated under clause 49 of the listing agreement entered into with the stock exchanges, subject to the disclosures in respect of Independent Directors, in Para 2 (a) above.
10 Means of communication:
I. The quarterly and half yearly financial results are published in any two of the national and local dailies such as Business Standard, Financial Express and Andhra Prabha.
II. Quarterly / Half yearly financial results of the Company are forwarded to the stock exchanges and published in Business Standard/Financial Express and Andhra Prabha. Half yearly report is not sent to each household of shareholders as the results are published in the news papers.
III. The results and other official news releases are also posted in the Company's website - www.nclind.com and BSE &NSE websites.
11) Shareholders information:
i) AGM 34th Annual General Meeting
Date : 29th September, 2015
Time: 11.00 A.M
Venue: KLN Prasad Auditorium, 3rd floor, Federation House, 11-06-841, FAPCCI Marg, Red Hills, HYDERABAD.-500004
i i ) Financial Year : April 1 to March 31 next.
iii) Date of Book Closure : 23/09/2015 to 29/09/2015, (both days inclusive)
iv) Dividend payment date : No dividend recommended for the year 2014-15.
v) Listing on Stock Exchanges and status of Listing fees
BSE & NSE Listing Fees paid Up to date.
vi) A) Script Code
BSE- 502168, NSE - NCLIND
B) Demat ISIN No in NSDL & CDSL for equity shares : INE732C01016
C) Corporate Id. No. : L33130AP1979PLC002521
viii) Address of Registrar and Share Transfer Agents
Venture Capital & Corporate Investments (P) Ltd 12-10-167 (MIG), Bharath Nagar HYDERABAD 500 018 Phones: 040-23818475 / 76 & 23868023 Fax : 040-23868024 E-mail:firstname.lastname@example.org
ix) Share transfer system:
Transfer of securities in physical form is registered and the duly transferred share certificates are dispatched within 30 days of receipt provided the transfer documents are in order. The Board of Directors has delegated powers to approve the transfer, transmissions, etc to Mr. K.Madhu, Director and Mr.T.Arun Kumar, Company Secretary.
xii) Dematerialization of Shares
The shares of the Company are compulsorily traded in DEMAT form by all categories of investors. The Company has arrangements with National Securities Depositories Ltd (NSDL) and Central Depository Services India Ltd (CDSL) to establish electronic connectivity of our shares for script-less trading. As stipulated by SEBI, a practicing Company Secretary carries Secretarial Audit to reconcile the total admitted capital with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL) and total issued and listed capital. As on 31st March 2015, 91.157 of shares of the Company were held in Dematerialized form with the following depositories.
xiii) Outstanding GDRs, ADRs or Warrants or Convertible Instruments:
During the year under review, there were no outstanding GDRs or ADRs. As on the date of this Report, the Company has no outstanding convertible instruments.
xiv) Risk Management
The company had laid down procedures to inform Board members about the risk assessment and minimization procedures.
xv) Plants Location:
CEMENT UNIT -I : Simhapuri,Mattampally Mandal, Nalgonda Dist-508204 Telangana
UNIT -II : Kadimpothavaram Village KondapalliKrishna District-521228 Andhra Pradesh BOARDS UNIT-I : Simhapuri,Mattampally Mandal, Nalgonda Dist-508204 Telangana
UNIT -II : Bhothanwali Village Paonta SahibSirmour District Himachal Pradesh-173025 ENERGY UNIT-I : Pothireddypadu Head Regulator, Chabolu Village, Pothulapadu Post, Nandikotkur TQ.-518402 Kurnool District, Andhra Pradesh
UNIT -II : RBHLC Zero Mile Point Tungabhadra DamTungabhadra Board Amaravathi Village Hospet-583225 Karnataka
PREFAB UNIT-I : Plot No. 34/A,IDA, Jeedimetla,Hyderabad-500 055 Telangana
UNIT -II : Bhothanwali Village Paonta Sahib Sirmour District Himachal Pradesh-173025
CONCRETE UNIT -I : Plot No.11A/2- IDA Patancheru,Hyderabad- 502319 Telangana
UNIT -II : Survey No.83,Plot No.91/CD-Block-IDA Auto Nagar, Visakhapatnam- 530026 Andhra Pradesh
xvii) Address for Investor Correspondence
The Company Secretary NCL Industries Limited 7th Floor, Raghava Ratna Towers, Chirag Ali Lane, Abids. Hyderabad 500001 Tel No : (040) 2320 2548 / 2320 3637 Fax No : (040) 2320 2496 E-mail ID : csdnclind.com/ email@example.com Website : www.nclind.com
xviii) CEO/CFO Certification
The CEO/CFO of the Company have issued a certificate to the Board on the matter specified under clause 49(ix)of the listing Agreement.
xix) Procedure for dealing with unclaimed shares in terms of Clause 5A of the Listing Agreement
There are no unclaimed shares as envisaged by Clause 5A of the Listing Agreement.
The above Report was adopted by the Board of Directors at their meeting held on 11th August, 2015.