REPORT ON CORPORATE GOVERNANCE FOR THE YEAR 2014-15 (IN ACCORDANCE WITH CLAUSE 49 OF THE LISTING AGREEMENT ENTERED INTO WITH STOCK EXCHANGE)
1. THE COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Rathi Steel and Power Limited (The Company) continuously strives to attain higher levels of accountability, transparency, responsibility and fairness in all aspects of its operations. Its business culture and practices are based upon a common set of strong ethical values. These principles govern the Company's relationships with customers, employees, shareholders, suppliers, regulatory authorities and the communities that it operates in.
BOARD OF DIRECTORS
The Board of Directors of the Company comprises of an optimum combination of Executive and Non- Executive Directors, which is in conformity with the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges.
The Board of the Company comprises Five Directors that includes one Women Director.
None of the Directors on the Board is a Member in more than 10 Committees and Chairman of more than 5 Committees, across all the companies in which he is a Director. The necessary disclosures regarding Committee positions have been made by the Directors.
Details of Directors, categories and attendance records are as under-
ii) Number of Board Meetings held
During the year ended March 31, 2015, twelve Board Meetings were held on the following dates:- April 11, 2014, April 23, 2014, May 15 2014, May 30, 2014, August 14, 2014, September 15, 2014, September 30, 2014, November 14, 2014, November 21,2014, February 14, 2015, March 5,2015and March 31, 2015. The maximum time gap between any two Board Meetings does not exceed the statutory limit of 120 days
iii) Brief Profile of Directors proposed for reappointment
As required under Clause-49 of the Listing Agreement, the brief resume of the Directors proposed for reappointment and other information is furnished below:-
Mr. Pradeep Kumar Rathi, aged 60 about is a Director of the Company since 1998. He is Graduate and having rich experience of about 25 years in Steel Business. He is a Director in Archit securities private limited & DBG leasing and housing limited. He holds 7504988 equity shares in the Company.
INDEPENDENT DIRECTORS :
The Company has complied with the definition of Independence as per Clause 49 of the Listing Agreement and according to the Provisions of section 149(6) Companies Act, 2013. The company has also obtained declarations from all the Independent Directors pursuant to section 149 (7) of the Companies Act, 2013.
i) Training of Independent Directors:
Whenever new Non-executive and Independent Directors are inducted in the Board they are introduced to our Company's culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, board procedures, our major risks and management strategy.
The appointment letters of Independent Directors has been placed on the Company's website at " www. rathisteelandpower.com
Performance Evaluation of non-executive and Independent Directors
The Board evaluates the performance of Non-executive and Independent Directors every year. All the Non-executive and Independent Directors are having wide experience in the field of business, industry and administration.
Their presence on the Board is advantageous and fruitful in taking business decisions.
iii) Separate Meeting of the Independent Directors :
The Independent Directors held a Meeting on 31st March, 2015, without the attendance of Non-independent Directors and members of Management. All the Independent Directors were present at the meeting. The following issues were discussed in detail:
I) Reviewed the performance of non-independent directors and the Board as a whole;
II) Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
Fraud-free and corruption-free work cultrue has been the core of the Company/ functioning. In view of the potential risk of fraud and corruption due to rapid growth and reographical spread of operations, the company has put even greater emphasis to address this risk.
To meet this objective, a Whistle Blower Policy has been laid down. The same policy as approved by the Board was uploaded on the Company's website: www.rathisteelandpower.com
COMMITTEES OF THE BOARD
The Board has constituted the following Committees for efficient functioning of the Company:-
i) Terms of Reference:
The Audit Committee acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting processes, reviewing the Company's established systems and processes for internal financial controls, governance and reviewing the Company's statutory and internal audit activities. The Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement.
Mr. Shree Kumar Daga, Chairman of the Audit Committee was present at the Annual General Meeting held on 30th September, 2014.
The composition of the Audit Committee and the details of meetings attended by the Directors are given below
Managing Director, CFO, Statutory Auditors and Internal Auditors are Permanent invitees. The Company Secretary of the Company acts as the Secretary to the Committee.
During the year 2014-15, five Audit Committee Meetings were held on 30th May 2014, 14th August, 2014, 30th September, 2014, 14th November, 2014 & 14fh February, 2015. The required quorum was present at the meetings.
Nomination and Remuneration Committee:
i) Terms of reference:
This Committee shall identify the persons, who are qualified to become Directors of the Company / who may be appointed in Senior Management in accordance with the criteria laid down, recommend to the Board their appointment and removal and also shall carry out evaluation of every director's performance. Committee shall also formulate the criteria for determining qualifications, positive attributes, independent of the Directors and recommend to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.
ii) Composition :
With the induction of M/s Akanksha Garg on the Board w.e.f 30th May, 2015 Nomination and Remuneration Committee of the Company consists of 3 Non-Executive and Independent Directors.
iii) No. of Meetings held during the year:
During the year the Committee had 1 meeting on 15th January, 2015.
iv) Composition, name of Members and attendance during the year:
Company Secretary was the Compliance Officer during the year under review. Company Secretary performed the functions of monitoring the complaints received visa-vis share transfer and other related processes and reported them to the Board.
Company Secretary also carried out his responsibility as liaison officer with the investors and regulatory authorities, such as SEBI, Stock Exchanges, Registrar of Companies, R.B.I, in respect of implementing laws, rules and regulations, and directives of such authorities concerning investor service and complaints.
No complaints were received from the shareholders during the year.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Shareholders / Investors Grievance Committee was renamed and reconstituted as Stakeholders Relationship Committee at a board meeting held on 30th September 2014.The Committee performs following functions:
Transfer/Transmission of shares
Issue of Duplicate Share Certificates.
Review of Share dematerialization and rematerialization.
Monitoring the expeditious Redressal of Investor Grievances.
Monitoring the performance of company's Registrar & Transfer Agent.
All other matters related to the shares.
During 2014-15 the committee was chaired by Mr. Shree Kumar Daga. At present the committee comprises of two Non-Executive Directors and one Executive director. One meetings were held on 31st March, 2015.
Risk Management Committee
The Board of Directors, during the year, constituted "Risk Management Committee" as required under Clause 49 of the Listing Agreement. The Committee is "responsible for risk identification, evaluation and mitigation and to set up process for risk management plan. The Risk Management Committee comprises of Mr. Prem Narain Varshney, Whole time Director who is the Chairman of the Committee and other members viz. Mr. Shree Kumar Daga, Director and Mr. Dwarka Das Lakhotia, Director
The Company Secretary acts as the Secretary to the Committee.
RELATED PARTY TRANSACTIONS
All transactions, if any, entered into with Related .Parties as defined under Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arms length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS 18) has been made in the notes to the Financial Statements.
The Board has approved a policy for related party transactions which has been uploaded on the Company's website.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company.
The company has always ensured fair code of conduct and maintained transparency. There were no instances of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.
In accordance with requirement of Companies Act as well as listing agreement a vigil mechanism has been adopted by the board of directors and accordingly a whistle blower policy has been formulated with a view to provide a mechanism for employees of the company to approach Internal Auditor or Chairman of the Audit Committee of the Company to report any grievance.
Compliances ,,rules & regulations as laid down by various statutory authorities has always been observed by the company, both in letter as well as in spirit.
The Board has obtained certificates/disclosures from key management personnel confirming they do not have any material financial and commercial interest in transactions with the company at large.
Compliance with Accounting Standards
In the preparation of the financial statements, the Company has followed the Accounting Standards notified pursuant to Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provision of the Companies Act, 2013 read with General Circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.
The Management Discussion and Analysis on all the matters as specified in Clause 49 of the Listing Agreement has been included and is a part of the Annual Report.
The Managing Director and the Chief Financial Officer of the Company have given a certificate to the Board of Directors as prescribed under Clause 49(V) of the Listing Agreement(s) for the year ending 31st March, 2015.
i) Means of Communication
Full and complete disclosure of information regarding the Company's financial situation and performance is an important part of the Company's Corporate Governance ethics. The Company has demonstrated this commitment by sending its Shareholders a full version of its Annual Report.
The Ministry of Corporate Affairs (MCA) has promoted "Green Initiative" to encourage e-enabled regulatory compliances. In furtherance of this important initiative, the MCA has permitted Companies to provide its shareholders documents, including the Annual Report, by electronic mode.
In support of MCA's endeavours in this direction, the Company will be sending its Annual Report as well as other shareholder correspondence by email, to those shareholders whose e-mail addresses are registered with the Company. However, in case Shareholders desire to receive a physical copy of the Annual Report, the Company will be happy to provide the same on their request.
The financial results of the Company are usually published in the "The Pioneer" (English) and "The Veer Arjun" (Hindi language) both Delhi editions
Website: the company's website www. rathisteelandpower.com contains a separate dedicated section "Investor" where shareholders information is available. The annual report of the company is also available on the website in a user-friendly and download form.
ii) Compliance Officer
Company Secretary is the compliance officer for complying with requirement of the Securities Laws and the Listing Agreements with the Stock Exchange.
iii) Insider Trading
In compliance with the SEBI regulations on prevention of insider trading, the Company has a Code on Insider Trading for its Directors, Management and designated Executives. The Code lays down guidelines, which advise them on procedures to be followed and disclosures to be made, while dealing in securities of the Company. Mr. Anil Gupta, Chief Finance Officer (CFO) was the Compliance Officer for complying with the said code for financial Year 2014-15.
iv) SEBI Complaints Redress System (SCORES):
The investor complaints are processed in a centralized web based complaints redress system. The salient features of this system are: Centralised database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned companies and online viewing by investors of actions taken on the complaint and its current status.
GENERAL SHAREHOLDER INFORMATION
i) Annual General Meeting: Date
Day 30th September, 2015 Wednesday
Time 11.00 A.M.
Venue : The Little Theater Group, Copernicus Marg, New Delhi-110001
ii) Financial Calendar (tentative):
Board Meeting to take on record Schedule Results for the
* Quarter ending 30th June, 2015 : On or before Aug 14, 2015
* Quarter ending 30th September, 2015 : On or before Nov 14, 2015
* Quarter ending 31st December, 2015 : On or before Feb 14,2016
* Quarter ending 31st March, 2016 L: On or before May 30, 2016
iii) Book Closure Date : 26th September, 2015 to 30th September, 2015 (Both days inclusive)
iv) Listing on Stock Exchanges:
The Equity Shares of the Company are listed on the following two Stock Exchanges:-
Name & Address of the Stock Exchanges
Bombay Stock Exchange Ltd. Floor 25, P J Towers, Dalai Street, Mumbai - 400 001
Stock Code : 504903
vi) Registrar and Share Transfer Agents:
M/s. Mas Services Limited, has been appointed as the Registrar and Share Transfer Agents for the equity shares of the Company in physical and electronic form. Shareholders/Investors can direct all correspondence with regard to share transfer, transmission and change of address etc. at their following address:-
M/s. Mas Services Limited (Unit Rathi Steel).
T-34, Second Floor, Okhla Ind. Area, Phase-ll, New Delhi-110020, Ph: 011-26387281-82-83 Fax No. 011-26387384 Email: firstname.lastname@example.org
vii) Share Transfer System:
M/s. Mas Services Limited Committee of the Company. The meeting of Share Transfer Committee is held to consider the share transfers. All the physical share certificates are sent to the transferees subsequent to transfer within the prescribed period.
viii) Status of Complaints/queries and their redressal as on March 31,2015:-
During the year 2014-15, the Company had not received any complaints. As on date, no complaints are pending other than those, which are under litigation, disputes or court orders.
ix) Pending Share Transfers:
No Share transfers were pending as on March 31, 2015.
x) Dematerialization of Equity Shares :
The Company has entered into an agreement with NSDL and CDSL for dematerialization of shares. As on March 31, 2015, a total of 30732417 Equity Shares representing 98.16% of the total Equity paid-up capital of the Company have been dematerialized. Members are advised to get their shares converted into demat mode. The shares of the Company can be traded in demat mode only.
The Company's ISIN No.: INE336C01016
xii) Outstanding GDRs/ADRs /Warrants etc:
The Company has no outstanding GDRs/ADRs/Warrants or any convertible instruments as on March 31, 2015.
xiii) Address for Correspondence:
Chauhan Market, Madanpur Khadar, Near Local Shopping Complex, Pocket- D & E, Sarita Vihar, New Delhi-110076 Ph. 011^4500 2400 Fax: 011-4500 2410 Web Site: www.rathisteelandpower.com E-mail ID: email@example.com