Company’s philosophy on code of governance
The basic objective of corporate governance policies adopted by the Company is to attain the highest levels of transparency, accountability and integrity. This objective extends not merely to meet with the statutory requirements but to go beyond them by putting into place procedures and systems, in accordance with best practices of governance. Your Company believes that Good Corporate Governance enhances the trust and confidence of all the stakeholders. Good practice in corporate behaviour helps to enhance and maintain public trust in companies and stock market.
Your Company reviews its corporate governance practices to ensure that they reflect the latest developments in the corporate arena positioning itself to conform to the best corporate governance practice. Your Company is committed to pursue excellence in all its activities and maximize its shareholders’ wealth.
The Company’s corporate governance policies and practices focus on the following principles:-
? To recognize the respective roles and responsibilities of the Board and Management.
? To achieve the highest degree of transparency by maintaining a high degree of disclosure levels
? To ensure and maintain high ethical standards in its functioning
? To give the highest importance to investor relations
? To ensure a sound system of risk management and internal controls
?To ensure that employees of the Company subscribe to the corporate values and apply them in their conduct
? To ensure that the decision making process is fair and transparent
? To ensure that the company follows globally recognized Corporate governance practices
Board of Directors :
The Company has Non-Executive Chairman (Promoter). As per clause 49 of the Listing Agreement, at least half of the Board should comprises of Non Executive Directors and if the Chairman is an Non-Executive Chairman (Promoter), at least half of the Board should consist of Independent Directors. The Board complies with clause 49. The board ensures the desired level of independence in functioning and decision making. More over all the Non – Executive Directors are eminent professionals, and bring the wealth of their professional expertise and experience to the management of the Company.
Composition of Board of Directors and details of their shareholding in the Company and external directorship and membership of the Board Committees
All the Independent directors of the Company furnishes a declaration at the time of their appointment as also annually that they qualify the conditions of their being independent. All such declarations were/are placed before the Board.
(A) Board Procedures
(a) Number of Board Meetings held, dates on which held
Seven board meetings were held during the financial year from 1st April 2013 to 31st March, 2014. The dates on which the meetings were held are as follows:
30TH June 2013 , 08th July-2013, 14th August 2013, 14th November 2013, 13th February 2014, 29th March 2014 & 31st March 2014.
(b) The information made available to the Board includes the following
1. Annual Operating Plans and budgets and any updates.
2. Capital budgets and any updates
3. Quarterly results for the Company and its operating divisions or business segments.
4. Minutes of meetings of audit committee and other committees of the board.
5. Information on recruitment and remuneration of senior officers just below the board level including appointment or removal of CFO and the Company Secretary.
6. Show cause, demand, prosecution notices and penalty notices which are materially important.
7. Fatal or serious accidents or dangerous occurrences, any material effluent or pollution problems, if any
8. Any material default in financial obligations to and by the Company or substantial non payment for goods sold by the Company.
9. Any issue which involves possible public or product liability claims of substantial nature, including any judgement 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.
10. Details of any joint venture, acquisition of companies or collaboration agreement.
11. Transaction that involves substantial payment towards goodwill brand equity or intellectual property.
12. Significant labour problems and their proposed solutions. Any significant development on Human Resource/ Industrial Relation front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc.
13. Sale of material nature, of investments, assets which is not in the normal course of business
14. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risk of adverse exchange rate movements, if material.
15. Non- Compliance of any regulatory, statutory or listing requirements and shareholders services such as non - payment of dividends, delay in share transfer etc.
The Board also periodically reviews compliance reports of all laws applicable to the Company, prepared by the designated employees as well as steps taken to rectify instances of non- compliance.
(B) Code of Conduct for Board Members and Senior Management Personnel
The Board of Directors had adopted a Code of Conduct for the Board Members and Senior Management Personnel.This Code helps the Company to maintain the Standard of Business Ethics and ensure compliance with the legal requirements, specifically under clause 49 of the Stock Exchange Listing Agreement of the Company. The Code is aimed at preventing any wrongdoing and promoting ethical conduct at the Board and Senior Management level.
The declaration regarding Compliance with the code of conduct as required under Clause 49 of the Listing Agreement with the Stock Exchange is appended to this report.
Code of Conduct for prevention of Insider Trading
The Company has adopted a code of conduct for prevention of insider trading in accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. The Company Secretary of the Company is the Compliance Officer. All the Directors and Senior Management Personnel and such other designated employees of the Company who are expected to have the access to unpublished price sensitive information relating to the Company are covered under the said code. The Directors, their relatives, senior management personnel, designated employees etc… are restricted from purchasing, selling and dealing in the shares while being in possession of unpublished price sensitive information about the Company during certain prohibited periods.
II . Composition of the Audit Committee:
The Company continued to derive immense benefit from the deliberations of the Audit Committee comprising of the following Independent Directors.
1. Sri S.C.Mishra , Chairman
2. Sri Raj Kumar Bajoria , Member
3. Sri Amitava Chaudhury
The Committee comprises of eminent professionals with expert knowledge in corporate finance. The Minutes of each audit committee meeting are placed before and discussed by the Board of Directors of the Company.
III . Meeting of Audit Committee
The Audit committee met five times during the year on 30th June 2013, 14th August 2013, 14th November 2013, 13th February 2014 , 29th March 2014.
IV. Powers of the Audit Committee
The powers of the Audit Committee 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.
V. Function of Audit Committee
The role of the Audit committee includes the following
• Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
• Reviewing with the management, the annual financial statements before submission to the board for approval, with particular reference to :
(i) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s Report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
(ii) Changes, if any, in accounting policies and practices and reasons for the same.
(iii) Compliance with listing and other legal requirements relating to financial statements.
(iv) Disclosure of any related party transactions.
• Reviewing, with the management, performance of statutory and internal auditors and adequacy of the internal control systems.
• Discussion with internal auditors any significant findings and follow up
• Reviewing, the findings of any internal investigations by the internal auditors
• 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.
• Carrying out any other function as is mentioned in the terms of reference of the Audit Committee
• The Audit Committee shall mandatorily review the following
i. Management discussion and analysis of financial condition and result of operation
ii. Statement of significant related party transactions ( as defined by the Audit Committee ), submitted by the management.
iii. Management letters/letters of internal control weakness issued by the statutory auditors;
iv. Internal audit reports relating to internal control weaknesses; and
SHAREHOLDER S / INVESTORS COMMITTEE :
A) SHARE TRANSFER COMMITTEE :-
The Share transfer Committee was constituted to deal with matters pertaining to Share Transfer /transmission, issue of duplicate Share Certificates, approving the split and consolidation request and other materials relating to transfer and registration of Shares.
The members of the committee are Sri Amitava Chaudhary, Whole time Directors and Sri Amulya Prasad Sahoo, DGM Finance. The Committee met on following occasions 15-11-2013 and 25-03-2014.
B) SHAREHOLDERS / INVESTORS GRIEVANCE S COMMITTEE
The Shareholders/Investors Grievance Committee specifically looks into issues such as redressing of shareholders’ and investors’ complaints such as transfer of shares, ensuring expeditious redressal.
The Shareholders/Investors Grievance Committee reviews and redress all the grievances periodically and meets as and when required . The Company have not received any grievances during the financial year 2013-14
This Committee comprises of the following two Directors.
Sri Raj Kumar Bajoria Chairman [till 13-02-2014]
Sri S.C. Mishra Member
The Company Secretary is designated as the Compliance Officer. Post resignation of Mr. Bajoria, Mr. Ramesh Dhandhania has taken over as chairman of the Committee.
During the period under review one meeting of the Committee was held on 25th of March 2014.
As per clause 49 of the Stock Exchange Listing Agreement, your company does not have any Material non –listed Subsidiary Company whose turnover or net worth exceeds 20% of the consolidated turnover or net worth respectively of the Company and its subsidiaries in the Immediately preceding accounting year.
a. Related Party Transactions
There were no materially significant related party transactions, pecuniary transaction or relationships between the Company and its directors, promoters or the management that may have potential conflict with the interest of the Company at large except the details of transactions disclosed in Point no.8 of note 24 on accounts forming part of the Accounts as required under Accounting Standard 18 of the Institute of Chartered Accountants of India, and all related party transactions are negotiated on an arms length basis.
All details relating to financial and commercial transactions, where directors may have potential interest are provided to the Board and the interested Directors neither participated in the discussion nor do they vote in such matters. The Audit Committee of the Company also reviews related party transactions periodically.
b. Accounting Treatment
The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India and in preparation of financial statements, the Company has not adopted a treatment different from that prescribed in any Accounting Standard.
The Management’s Discussion and Analysis Report is appended to this report.
• Disclosures regarding appointment or re-appointment of Directors
As per the Companies Act, 1956 at least 2/3rd of the Board should consist of retiring Directors, of these at least 1/3rd are required to retire every year.
Except the Managing Director all other Directors are liable to retire by rotation as per the provisions of the Companies Act, 1956. Shri Vimal Prakash, Sri Vijay Kumar Agarwal, Shri Bhagwati Prasad Jalan will retire at the ensuing Annual General Meeting and being eligible offers themselves for re appointment.
• Communication to shareholders
The unaudited quarterly/ half yearly financial statements are announced within forty five days of the end of the quarter. The aforesaid financial statements are taken on record by the Board of Directors and are communicated to the stock exchange where the shares of the company are listed. Once the stock exchange have been intimated these results are published within 48 hours in two leading newspaper – One in English and one in Odia.
The audited annual results are announced with in two months from the end of the last quarter as stipulated under the Listing Agreement with the Stock Exchange. But since their was unprecendented labour/workmen agitation to make the management fulfill their extortionate demand , but the efforts of management for conciliation led no fruitful results . The management was left with no option but to declare Lock –out since their was threat to life and property of the company by the agitators. The impasse continued and the agitators blocked the entrance to factory of those who were willing to work . Thereby not able to comply the obligation with the clause 41 of the listing agreement for the treasons beyond its control . For the purpose of submission of financial accounts, our primary books are kept and maintained at factory but the agitators made it inaccessible for us to enter and work.
• Investors’ Grievances and Share Transfer
As mentioned earlier, the Company has a Board-level Investors Grievance Committee to examine and redress shareholders and investors’ complaints. The status on complaints and share transfers is reported to the Committee.
For matters regarding shares transferred in physical form, share certificates, change of address etc shareholders should send in their communications to S K Infosolutions Pvt. Ltd. our registrar and share transfer agent.
Their address is given in the section on shareholder information.
• Details of Non- Compliances
The company is regular in compliant to statutory rules and regulations and no penalties or strictures have imposed on the Company by the Stock Exchange or SEBI or any statutory authority, on any matter related to Capital Markets, during the last three years. But due to in accessibility to its factory and records the Company was not able to comply with Clause 41 and hence pursuance to SEBI circular no. CIR/MRD/DSA/31/13 dated 30th September, 2013 actions have been initiated by Bombay Stock Exchange Limited against the same actions have been taken at Honourable High Court of Kolkata.
CEO /CFO CERTIFICATION
As required by clause 49 of the Listing Agreement, the certificate from Sri S.Asokan , Chief Executive Officer, was placed before the Board of Directors at their meeting held on 25th March ,2015.
COMPLIANCE WITH CORPORATE GOVERNANCE NORMS
i. Mandatory Requirements
The Company has complied with all the mandatory requirements of Corporate Governance norms as enumerated in clause 49 of the Listing Agreement with the Stock Exchange.
The Company has not adopted non – mandatory requirements such as training of board members, mechanism for evaluating the non- executive board members and whistle blower policy. However the Company has fullycomplied with SEBI guidelines relating to Corporate Governance in respect of compliance of mandatory requirements.
AUDITOR S REPORT ON CORPORATE GOVERNANCE
As required by clause 49 of the Listing Agreement, the auditors’ certificate is given as an annexure to the Directors Report.
1. Means of Communication:
• Financial Results:
Due to unprecendented labour/workmen agitation to make the management fulfill their extortionate demand and the efforts of management for conciliation not leading to any fruitful results . The management was left with no option but to declare Lock –out since their was threat to life and property of the company by the agitators. The impasse continued and the agitators blocked the entrance to factory of those who were willing to work. Thereby not able to comply the obligation with the clause 41 of the listing agreement for the treasons beyond its control . For the purpose of submission of financial accounts, our primary books are kept and maintained at factory but the agitators made it inaccessible for us to enter and work and all updates were sent immediately to the stock exchange with which the shares of the Company are listed.
• Other information:
The Company has email address firstname.lastname@example.org to interface with the investors.
• Management’s Discussion and Analysis Report:
The Management’s Discussion and Analysis report forms part of the Annual Report.
2. General Shareholders’ information:
• AGM: Date, Time & Venue – 30th June, 2015 at 12:30 P.M. at‘Hotel Pushpak, Bhubaneswar’As required under clause 49IV(G)(i), particulars of Directors seeking appointment/re- appointment are given in the Notice of the Annual General Meeting to be held on 30th June, 2015.
• Financial Year Calendar for 2013-14 (Tentative):
Results for the quarter ending 30th June, 2014 :August, 2014*
Results for the quarter ending 30th September, 2014 : November, 2014*
Results for the quarter ending 31st December, 2014:February, 2014*
Results for the quarter ending 31st March, 2014 : May, 2015
* As the Company’s factory was lock out we.f. 24th March 2014 to 19th Dec 2014, company was not able to furnish the results of first three quarters as per schedule and hence complied once the locked out ceased out at factory.
• Date of Book Closure:
The books will be closed for the Annual General Meeting from 25th June, 2015 to 30th June, 2015 (both days inclusive).
• Dividend Payment :-
No dividend is recommended by the Board of Directors for the year.
• Listing on Stock Exchanges:
The Company’s equity Shares are listed on the Stock Exchange located at Mumbai and Kolkata
The Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers , Dalal Street , Mumbai – 400 001
The Calcutta Stock Exchange Association. Limited
7, Lyons Range, Kolkata – 700 001
ISIN No. of company’s equity Shares in Demat Form
With Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL)
• Stock Code:
The Calcutta Stock Exchange Association Limited - 19120
The Bombay Stock Exchange Limited - 502294
• Registrar and Transfer Agent:
Physical & Demat: :
S K infosolutions Pvt.Ltd
34/1 Sudhir Chatterjee Street, Kolkata – 700006
Share Transfer System:
All the shares are being transferred and returned within 15 days from the date of receipt, so long as the documents have been cleared in all respect.
i. Dematerialisation of Shares:
As stated earlier, the Company’ shares are listed on the Stock Exchange. As per the SEBI notifications, trading in Company’s shares has been made compulsorily in dematerialised form w.e.f. 26th December, 2000 and Company’s Registrar & Transfer Agent have established connectivity with NSDL & CDSL. But Subsequent to lock out being declared and company not able to comply with requirements of listing agreement , the Company’s Scrip has been suspended for trading on BSE w.e.f 28th Nov 2014 and aggrieved by the order the Company has filed a writ petition against the same in Honorable High Court Of Calcutta.
• Address for Correspondence
Nilachal Refractories Limited
Registered Office :
Plot No- P598/599 , Kedarnath Apartment, Mahabir Nagar Lewis Road , Bhubaneswar-751 002, Odisha
Nilachal Refractories Limited ,
Ipitata Nagar , Dhenkanal 759 013, Odisha