1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Rajkumar Forge Limited's philosophy on Corporate Governance aims at establishing and maintaining a mechanism by which the most effective and efficient values, principles, management policies and procedures are adopted with highest level of transparency and accountability throughout the organization. It is not only for facing intense competition for sustainable growth in the global business scenario but is also an embodiment of the parameters of fairness, accountability and transparency to maximize value for the stakeholders. The Company believes in maintaining highest standard of quality and ethical conduct, in all the activities of the Company.
This chapter of the report plus the information given under the Management Discussion and analysis and Shareholder Information constitutes the report on Corporate Governance for the Year 2014-2015.
2. Board Level Issues
• Composition of Board
The Board of Directors consists of six Directors as on 31'st March 2015, comprising of Chairman who is a non-executive Director, Managing Director who is an executive director. The other three (3) Directors are non-executive , and all of them are independent. Mrs.Ratnaprabha .R.Kothavale is appointed as women Director and Additional Director on the Boar of Directors of the Company effective from 14'th February,2015,
None of the Directors is a member of more than 7 Board level committees of Public Companies in which they are Directors.
Other directorship do not include alternate directorship,of private limited companies. companies not for profit and companies incorporated outside India. In accordance with clause 49 of the listing agreement Membership/Charimanship of only the Audit Committee and Stake Holders Committee in all Public Limited Companies (excluding Rajkumar Forge Limited) have been considered.
INFORMATION PLACED BEFORE THE BOARD
The Board of Rajkumar Forge Limited is presented with all relevant information on various vital matters affecting the working of the Company in addition to the matters set out in Annexure IA of Clause 49 of the Listing Agreement. Also extensive information is provided on various critical matters such as production, sales, export, financial performance, foreign exchange exposure, staff matters, legal proceedings, share transfer compliance, quarterly financial results, significant labour and human relation matters, and other such matters with detailed notes along with agenda papers.
As mandated by Clause 49, the independent Directors on Rajkumar Forge Limited:
1. Apart from receiving Director's remuneration ,do not have any material pecuniary relationships or transactions with the company, its promoters, its' directors, Its senior management which may affect independence of Director.
2. Are not related to promoters or persons occupying management positions at the Board level or at one level below the Board.
3. Have not been executive of the Company in the immediately preceding three financial years.
4. Are not partners or executives or were not partners or executives during the preceding three financial years :
a) Statutory audit firm or the internal audit firm that is associated with the Company.
b) Legal firm and consulting firm that have a material association with the Company.
5. Are not material suppliers, service providers or customers or lessors or lessees of the Company, which may affect independence of the directors.
6. Are not substantial shareholders of the Company i.e do not own two percent or more of block of voting power.
7. Is not less than 21 years of age
SEPARATE MEETING OF INDEPENDENT DIRECTORS
As stipulated by the Code Of Independent Directors under Companies Act,2013 and Listing Agreement a separate meeting of the Independent Directors of the Company was held on 14'th February, 2015 to review performance of the non-independent directors and the Board as a whole. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between management and the Board and its committees which is necessary for the management to effectively and reasonably perform and discharge their duties. The independent directors were made familiar with the areas of operation, process flow, organisation structure and strengths of the Company. The Company is arranging visit of independent directors to manufacturing facilities of the Company and getting them accounted with production process.
NOMINATION AND REMUNERATION COMMITTEE
Composition and Attendance at the Meeting The Nomination and Remuneration Committee comprises of the members as stated below .The Committee during the year ended 31'st March,2015 had one meeting.
Terms of reference of the Nomination and Remuneration Committee
The Committee is empowered to:-
1. Formulate criteria for determining qualifications, positive attributes and independence of directors and evaluating the performance of Board of Directors.
2. Identifying and assessing potential individuals with respect to their expertise ,skills, attributes ,personal and professional standing for appointment and re-appointment as Directors/ Independent Directors on the Board as Key Managerial Personnel.
3. Support Board in evaluation of performance of all the Directors and in annual self assessment of Boards' overall performance.
4. Conduct Annual Performance Review of Managing Director and Senior Management Employees.
5. Formulate a Policy relating to remuneration of Directors, Committee and Senior Management Employees.
The Company follows a policy on remuneration of Directors and Senior Management Employees.
Remuneration of Non-executive Directors
The non-executive directors are entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in Board / Committee Meetings as detailed hereunder :
i. A non-executive director shall be entitled to receive sitting fees for attending each meeting of the Board or Committee thereof attended by him of such sum as may be approved by the Board of Directors with in the over all limit prescribed by Companies Act, 2013 and Companies Managerial Remuneration Rules, 2014.
ii. A non-executive director will be entitled to receive commission on an annual basis of such sum as may be approved by the Board on the recommendations of Nomination and Remuneration Committee.
iii. The Nomination and Remuneration Committee may recommend to Board the payment of commission on uniform basis to reinforce the principle of collective responsibility.
iv. The Nomination and Remuneration committee may recommend higher commission for chairman of the Board considering his overall responsibility.
v. In determining the quantum of commission payable to directors, the Nomination and Remuneration Committee will make its recommendations taking into consideration the overall performance of the Company and responsibilities shouldered by the director.
vi. Nomination and Remuneration committee may recommend to Board additional commission to the directors who are members of the Audit Committee, subject to ceiling on total commission payable.
vii. The total commission payable shall not exceed 1% of the net profits of the Company.
viii. The commission shall be payable on prorata basis to those directors who occupy office for part of the year.
ix. The Independent Directors shall not be entitled to participate in stock option scheme of the Company
REMUNERATION OF MANAGING DIRECTOR
i. At the time of appointment or reappointment , the managing director shall be paid such remuneration as may be mutually agreed, within the overall limits prescribed under the Companies Act, 2013.
ii. The remuneration shall be subject to approval of the Members in General Meeting.
iii. The remuneration of Managing Director may be dividend in to fixed and variable component. The fixed component will include salary, allowances, perquisites and other amenities. The variable portion may include performance bonus.
iv. In determining the remuneration the Nomination and Remuneration Committee may consider following:
a. The relationship of remuneration and performance benchmark is clear.
b. Balance between fixed and incentive pay reflecting long term and short term performance objectives of the Company and its goals.
c. Responsibility required by Managing Director and Industry Benchmark and current trends.
d. The Company's performance and annual budget achievements
REMUNERATION OF SENIOR MANAGEMENT EMPLOYEES
i. In determining the remuneration of the Senior Management employees , the Nomination and Remuneration Committee shall consider following.
a. The relationship of remuneration and performance benchmark is clear
b. Balance between fixed and incentive pay reflecting long term and short term performance objectives of the Company and its goals.
c. The remuneration is divided in to two components fixed component and performance based incentive
d. The remuneration including Annual Increment and performance incentive is based on the criticality of the roles and responsibilities, individual performance, industry benchmark and current compensation trend in the market.
ii. The Managing Director will carry out individual performance review based on the standard appraisal matrix and recommend the Annual Increment and Performance incentive to the Nomination and Remuneration Committee.
3 AUDIT COMMITTEE
The role and terms of reference of the Audit Committee covers the matters specified under Clause 49 of the Listing Agreement with the Stock Exchanges, Section 177 of the Companies Act, 2013 other terms as may be referred by the Board of Directors and interalia includes the following :
1. Reviewing 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. Reviewing with the management the annual and quarterly financial statements before submission to the Board
3. Discussing with Internal Auditors any significant findings and follow up on such issues;
4. Reviewing with the management ,external and internal auditors , the adequacy of internal control system
5. Reviewing details of related party transactions
6. Reviewing the Company's financial and risk management policies.
7. Reviewing any changes in accounting policies or practices as compared to last completed financial year and commenting on any deviation from accounting standards etc.
8. Discussing with the statutory auditors before the Audit Commences on the nature and scope of Audit, as well as having post audit discussion to ascertain area of concern. The Audit Committee comprises of two (2) non-executive and independent directors, Mr.Pradeep Bhargava and Mr. Swastik Sirsikar and one (1) executive director Mr. Rajkumar S.Kothavale . Mr. Pradeep Bhargava is Chairman of the Committee. All members are financially literate and have related financial management expertise . Accounts officers and financial executives , the Statutory Auditors and the Internal Auditors also attend the Audit Committee Meetings. The Company Secretary acts as a Secretary of the Committee.
5. COST AUDIT :-
Provisions of Cost Audit are not applicable to the Company.
6. STAKE HOLDERS COMMITTEE ( INVESTOR/SHAREHOLDERS GRIVANCE COMMITTEE)
The Shareholder's/Investor Grievance Committee of the Board has been constituted to look into complaints like transfer of shares , non-receipt of Balance Sheet, Non-receipt of Annual Report etc.
The Committee comprises of Mr.Swastik Sirsikar and Mr.R.S.Kothavale, executive Director. Mr.Swastik Sirsikar as Chairman of the Committee. The status of Complaints is reported to the Board of Directors at every Board Meeting.
Mr.Vijay.V. Kulkarni,Comapany Secretary ,Member of the Institute of Company Secretaries of India , is Compliance Officer. The Compliance Officer can be contacted at :
Rajkumar Forge Limited
18, Shivaji Co-oprative Housing Society Off Senapati Bapat Road, Pune-411016
Tel :-020 - 25639050 / 51/ 52 Fax :020- 25639049 EMAIL: firstname.lastname@example.org , email@example.com
The total number of complaints received and replied to the satisfaction of shareholders and SEBI during the year ended 31'st March 2015 were Nil. There were no complaints pending as on 31'st March, 2015.
7. PARTICULARS OF APPOINTMENT AND REAPPOINTMENT OF DIRECTORS :
1. Mr.Shantanu.R.Kothavale : Shantanu.R.Kothavale is graduate in electronics with computer as major from Santa Clara University,California,USA. He is having total 26 years of rich experience in various capacities in hardware and software in USA. Currently he is holding position as Director Engineering in Riverstone Networks,Inc.,Santa Clara,USA.
He is holding 10,04,100 (Ten lac four thousand and one hundred) equity shares of the Company as on 31'st March,2015 and his shareholding in the Company is 9.18% of the paid up equity capital of the Company. He is related to the promoter Director , Mr. R . S .Kothavale.
2. Mrs.Ratnaprabha.R.Kothavale :- Ratnaprabha Kothavale is appointed as women director and additional director of the Company effective from 14'th February,2015. She is related to Mr.R.S.Kothavale ,Promoter Director and Shantanu.R. Kothavale, Director of the Company.She is holding 20,500 equity shares viz 0.18% of the paid up capital of the company.
8. DISCLOSURES UNDER THE COMPANIES ACT 2013
Extract of Annual Return:- The details forming part of Annual Return are enclosed as annexure to Directors Report.
a) No of Board Meetings : The Board of Directors met 4 (four) times in the year 2014-2015.
b) Changes in share capital : During the year under review there was no change in the paid up equity share capital of the company, which remained at 1,09,39,400 equity shares of Rs. 10/- each fully paid up aggregating to Rs. 10,93,94,000/-.
c) Composition of Audit Committee :- The Board has constituted Audit Committee which comprises of Mr. Pradeep Bhargava as Chairman and Mr. Swastik Sirsikar and Mr. R.S.Kothavale as members which remained un-changed. More details are given in the Corporate Governance Report.
d) Related Party Transactions :- All the related party transactions are entered into on arm length basis and are in compliance with the applicable provisions of the Companies Act 2013 and the Listing Agreement. There are no materially significant related party transactions made by the Company with Promoters ,Directors or Key Managerial Personnel, which may have potential conflict with the interest of the company at large. All related party transactions are presented to the Audit Committee and the Board. Omnibus approvals is obtained for the transactions which is foreseen and is repetitive in nature . A statement of all related party transactions is presented before Audit Committee on quarterly basis ,specifying the nature, value and terms and conditions of the transactions. The related party transaction policy is approved by the Board. The details of the transactions with the related party are provided in the accompanying financial statement and are also made available on web site of the Company at www. rkforging.com
e) Corporate Governance :- The Company has complied with the Corporate Governance requirements under the Companies Act,2013 and as stipulated in the listing agreement with The Bombay Stock Exchange Ltd. A separate section on corporate governance under the Listing Agreement along with a Certificate from the auditors confirming compliance is annexed and form part of the Annual Report.
f) Internal Control System:- A strong internal control culture is prevalent in the Company. A firm of Internal Auditors reviews all the major processes to ensure reliability of financial reporting. Timely feedback on compliance with policies, procedures, laws and regulations, safeguarding assets and economical and efficient use of resources. Internal Audit continuously monitors the efficacy of internal controls with the objective of providing the Audit Committee and Board of Directors ,an independent, objective and reasonable assurance on the adequacy and effectiveness of organizations risk management ,control and governance process.
g) Vigil Mechanism /Whistle Blower Policy :- A vigil Mechanism/ Whistle Blower Policy is laid down by the Company . The details of the Vigil Mechanism /Whistle Blower Policy are available on the website of the Company at www.rkforging.com
h) Appointment of Chief Financial Officer : Company's making efforts to appoint suitable person as chief financial officer of the Company.
Directors and Key Managerial Personnel:-
1. In accordance with provisions of Section 152(6) Mr.Shantanu.R.Kothavale retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. Mrs.Ratnaprabha Kothavale who was appointed as additional director up to the ensuing Annual General Meeting and is eligible for appointment as director of the Company.
2. Appointment of Independent Directors :- In accordance with Companies Act, 2013 Mr.S.Padmanabhan, Mr. Pradeep Bhargava and Mr. Swastik Sirsikar have been appointed as Independent Directors under Section 149 Companies Act, 2013.The shareholders have at the 24'th Annual General Meeting held on Monday, 11'th day of August, 2014 approved their appointment for a period of five years.
3. Evaluation of Board's Performance :- In compliance with the Companies Act,2013, and clause 49 of the Listing Agreement , the performance evaluation of the Board was carried out during the year under review. More details of the same are given in Corporate Governance Report.
4. Remuneration Policy :- The Company follows a policy on remuneration of Directors and Senior Management Employees. The Policy is approved by Nomination and Remuneration Committee and the Board.
5. Particulars of Employees : The information as required under Section 197 of the Companies Act,2013 and rules made there under forms part of this report.
6. Transfer to Investor Education and Protection Fund :- The Company will be transferring unclaimed dividend for the year 2008-2009 to Investor Education and Protection Fund established by Central Government. The amount represent unclaimed dividend which were lying with the Company for period of seven years from the respective due date. The Company has reminded shareholders for submitting their claims for unclaimed dividend through annual communication in the Annual Reports.
During the year under review, there has been no materially significant related party transactions with the Directors or management that may have potential conflict with the interests of the Company at large.
i) During the last three years, there were no strictures or penalties imposed by either SEBI or the stock exchanges or any statutory authority for non-compliance of any matter related to the capital markets.
j) Equity shares of the company continues to be listed on The Bombay Stock Exchange Limited,having nationwide trading terminals. The Stock code of the Company is 513369.
k) The National Securities Depository Services Limited ( NSDL) and Central Depository Services ( India ) Limited ( CDSL) continues to admit the equity shares of the Company for dematerialization.
l) Your Company conforms to the mandatory norms of Corporate Governance as envisaged in the Companies Act, 2013 and in the Listing Agreement entered into with The Bombay Stock Exchange Limited . A report on Corporate Governance, along with the certificate of compliance from the Auditors forms part of this report. The company has not adopted the non-mandatory requirements as mentioned in Annexure ID of Clause 49 of the Listing Agreement.
4. MEANS OF COMMUNICATION
The quarterly results were published in national daily news papers- The Free Press Journal ( English edition) and Navshakti ( Marathi edition) on following dates as given below :
a. Audited Financial Results for the period ended on 31.03.2014 on 01.06.2014.
b. Unaudited Financial Results - First Quarter ended on 30.06.2014 on 12.08.2014.
c. Unaudited Financial Results -Second Quarter ended on 30.09.2014 on 15.11.2014.
d. Unaudited Financial Results -Third Quarter ended on 31.12.2015 on 15.02.2015.
The Company issues notices to the shareholders regarding convening of General Meeting and communication with Stock Exchanges, SEBI and the Registrar of Companies, Pune by Registered Post, Courier and Fax and online filing wherever necessary. The Company's website address is www.rkforging.com where by all the necessary information relating to the Company and its performance is maintained by the Company.
5. GENERAL SHAREHOLDER INFORMATION :
Annual General Meeting:
I) Date and Time : 10th August,2015 at 10.30 A.M.
Venue : Poona Club Limited,6, Bund Garden Road, Pune-411001
II) Financial Year :
1'st April,2014 to 31'st March, 2015
III) Date of Book Closure:
4'th August,2015 to 10 'th August, 2015 (both days inclusive)
IV) Dividend Payment date :
The Board of Directors has not recommended dividend in view of inadequate profits.
V) Listing on Stock Exchanges:
The Company's shares are listed on The Bombay Stock Exchange Limited
Stock Code 513369
VII) Registrar and Transfer Agents :
Your Company has appointed M/s Link Intime India Private Limited ( Formerly known as Intime Spectrum Registry Limited) as its Registrar and Transfer Agents . It is a SEBI registered Registrar and Transfer Agent .The entire work relating to processing of transfer of shares transmission , sub-division, consolidation, issue of duplicate certificates, request of demateralisation and remateralisation of company's equity shares and investor relation has been assigned to M/s Link Intime India Private Limited :
Head Office : C-13,Pannalal Silk Mills Compound L.B.S. Marg Bhandup,Mumbai 400078
Telephone No : ( 022 ) 25963838 Fax No : (022)25946979
Pune Office :
Block No 202, Second Floor, Akshay Complex, Dhole Patil Road, Pune - 411001
Telephone No 020- 26160084, 26161629, 26051629 Telefax : 020 - 26053503
E-mail ID : firstname.lastname@example.org
VIII) Share Transfer System:
The Board has constituted the Share Transfer Committee by delegating the power of share transfer severally to Mr.Rajkumar S.Kothavale, Managing Director and Mr.Swastik Sirsikar, Director with a view to facilitate quicker transfer and dematerialization of equity shares . The Committee meets on a weekly basis to consider and approve the transfer, transmission, consolidation, sub division and issue of duplicate certificates. The Company's R& T Agent M/s Link Intime India Private Limited issues share certificate of transfer to the shareholders within 15 ( fifteen) days of receipt of certificate for transfer, excepting those rejected on technical grounds .
IX) Dematerialization of Shares :
The equity share of the Company have been admitted for dematerialization on NSDL and CDSL effective from 10'th March, 2008 and 23'rd January, 2008 respectively and ISIN NO. - INE 013J01016 has been allotted to the Company.
As on 31 st March , 2015 11,22,500 equity shares viz10 .26 % of the paid -up equity share capital has been dematerialized.
X) Outstanding GDRs/ADRS/Warrants or Any Convertible Instruments, conversion date and likely impact on equity.
XI) Plant Location : Gat No 357, Kharabwadi, Chakan Talegaon Road, Chakan 410501, Taluka Khed, District Pune.
XII) Address for correspondence :
Shareholder's Correspondence can be addressed to :
1. Link Intime India Private Limited :
Head Office : C-13,Pannalal Silk Mills Compound L.B.S. Marg Bhandup, Mumbai 400078
Telephone No : ( 022 ) 25963838 Fax No : ( 022) 25946979
Pune Office : Block No 202, Second Floor, Akshay Complex, Dhole Patil Road ,Pune -411001
Telephone No (020) 26163503, 26161629 E-mail ID : email@example.com
2. The Company Secretary Rajkumar Forge Limited
18,Shivaji Housing Society Off Senapati Bapat Road, Pune - 411016
Tel : 25639050,25639051,25639052 Fax : 25639049
Email : firstname.lastname@example.org , email@example.com \