26 Apr 2017 | Livemint.com

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RMG Alloy Steel Ltd.

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RMG Alloy Steel Ltd. Accounting Policy

CORPORATE GOVERNANCE - CLAUSE 49 OF THE LISTING AGREEMENT

1. Company's Philosophy

RMG Alloy Steel Limited (Formerly known as "Remi Metals Gujarat Limited") believes that for a company to succeed on a sustained basis, it must maintain global standards of corporate conduct towards its employees, shareholders, consumers and society.

The primary objective is to create and adhere to a corporate culture of conscience and consciousness, transparency and openness.

2. Board of Directors

b. Number of Board meetings held, dates of which Board Meetings held:

During the year 2014-15, the Board of Directors met five times on the following dates: -27.05.2014, 12.08.2014,10.11.2014, 10.02.2015 and 31.03.2015.

3. AUDIT COMMITTEE

Terms of reference:

The terms of reference stipulated by the Board of Directors to the Audit Committee are as contained under clause 49 of the Listing Agreement.

Composition:

Meetings and attendance during the year:

Four meetings of Audit Committee of Board of Directors were held on 27.05.2014, 12.8.2014, 10.11.2014 and 10.02.2015.

4. NOMINATION AND REMUNERATION COMMITTEE

In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration Committee" as the "Nomination and Remuneration Committee".

Terms of Reference

The terms of reference stipulated by the Board of Directors to the Nomination and remuneration committee are as contained under clause 49 of the Listing Agreement.

In compliance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Ashok Jain, an Independent Director, has been appointed as Chairman of this Committee.

Three Nomination and Remuneration Committee meetings were held during the financial year i.e. on 27.05.2014, 10.02.2015 and 31.03.2015.

Remuneration policy

Nomination and Remuneration committee (NRC) at their meeting held on 27th May 2014 approved and recommended policy relating to criteria for determining qualifications, positive attributes and independence of directors, the remuneration for the directors, key Managerial Personnel (KMP) and other employees, formulation of criteria for evaluation of independent directors and the Board, policy on Board diversity; the Board of directors approved the said policy as recommended by NRC at its meeting held on 27th May 2014;

Nomination and remuneration policy is reproduced as under:

1. Objective of the Committee:

The Company believes that individuals associated with the Company are its most important asset and it can achieve its vision of becoming a global leader with support of directors and employees. While achieving Company's growth, the Company is committed to fulfill the aspirations of our Customers, Employees and Shareholders.

2. Constitution of Nomination and Remuneration Committee:

Nomination and Remuneration Committee shall be constituted by the Board of Directors and its members shall be selected from amongst the directors serving on the Board of Directors.

The Board may induct or remove any member of the Committee at its sole discretion.

3. Role and responsibility:

The Committee shall focus on recommending, persons who may be appointed as directors, KMP and senior management officials, to the Board of Directors. The Committee shall also scan performance of directors, KMP and senior management and recommend their removal if the performance is found unsatisfactory. The Board may mandate duties as it may deem fit from time to time.

4. Identification of persons who may be appointed as directors:

The Committee shall identify persons who may be appointed as directors of the Company and recommend their appointment to the Board of Directors in this regard. While recommending appointment of any such persons as directors the Committee shall consider following aspects:

a. Business of the Company,

b. Strength, weakness, opportunity and threats to Company's business,

c. Existing composition of the Board of Directors,

d. Diversity in background of existing directors,

e. Background, skills, expertise and qualification possessed by persons being considered,

f. Specific requirements under Companies Act, 2013, standard listing agreement and any other laws as to composition of the Board.

5. Recommending appointment of Independent Directors

The Committee shall regularly review composition of the Board of Directors and recommend appointment of persons who may be qualified to be Independent Directors pursuant to provisions of section 149(6) of the companies act 2013

Apart from being 'Independent', such candidate should be eligible worthy to be appointed as directors based on criteria mentioned below:

An independent director shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the company's business.

6. Appointment of Key Managerial Personnel and senior management personnel

The Committee shall review organization structure. It shall identify persons who may be appointed as Key Managerial Personnel or as a part of senior management. While recommending appointment of any such candidate, the Committee shall consider expectations of the role of the position being considered, qualification, skill, expertise, background, human qualities such as abilities to perform as a part of a team, emotional quotient, etc.

7. Remuneration of directors, Independent Directors, KMPs, senior management personnel

The Committee shall recommend the remuneration payable to directors, Independent Directors, KMPs, senior management personnel. The Committee shall consider top industry indicators, requirements of role, qualification and experience of candidate, challenges specific to the Company and such other matters as the Committee may deem fit. The Committee shall consider that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate individuals of the quality required to run the Company successfully. The remuneration must motivate individuals to achieve benchmarks which must be aligned to the vision of the Company.

8. Evaluation of performance

The Committee shall screen and evaluate performance of Non-independent directors, Independent Directors, KMPs, senior management personnel, various committees of the Board. Evaluation of performance should provide both positive and negative aspects of performance. The Committee will suggest areas of improvement, if any. The Committee will co-ordinate the process of self-evaluation of the Board. During such process, the Committee shall review performance of the Company, deliberations at the Board meetings, impact of the decisions, etc.

9. Powers:

The Committee may seek support of advisors from within the Company or from outside. It may seek such reasonable support as it may deem fit. The Company shall facilitate functioning of the Committee.

10. Meetings of Nomination and Remuneration committee

The Committee shall meet at least once a year. It may have additional meetings as it may require or as may be directed by the Board.

11. Evaluation Criteria

The Nomination and Remuneration committee has laid down criteria for performance evaluation of Board, its committees, independent directors, non-independent directors and Chairperson to comply provisions of Sections 134(3)(p), 149(8) and 178(2) of the Companies Act, 2013 and Clause 49(II)(B)(5) and (6) of the Listing Agreement as follows:

The guideline for the board evaluation policy and the process to implement it was that it should be :-

i. Simple with ease to understand and handle the instruments to be used for this purpose;

ii. Able to meet the statutory requirements; and

iii. Having accent on improvement of the performance of the board, its committees and the directors, instead of being judgmental in nature.

iv. The Nomination and Remuneration Committee of the board would formulate the criteria for the evaluation and generally oversee the process.

v The evaluation of individual directors would have two parts, viz., (a) quantitative data in the form of number of meetings of the board and committees attended as against the total number of such meetings held, and (b) qualitative data coming out of the process of filling in a questionnaire by the directors, which would be subjective, by its very nature.

vi. In order to induce the respondents to give their frank views, the instruments would be so designed that only ticks would be required, with no provision for description and the directors would not be required to identify themselves below the filled in questionnaire.

vii. The result of the evaluation would be discussed threadbare by the Board and remedial action taken.

viii. In case of individual directors' performance falling below a threshold, there would be a provision for individual counseling by the Chairman of the Company.

Meeting of Independent directors

The independent directors of the Company shall hold at least one meeting in a year without the attendance of non-independent directors and members of management. The meeting of Independent directors was held on 31 March 2015 and the following points were discussed:

- reviewed the performance of non-independent directors and the Board as a whole;

- reviewed the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;

- 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.

Details of remuneration paid to Mr. Shashank Chaturvedi, Executive director upto 12.11.2014:

5. STAKEHOLDERS RELATIONSHIP COMMITTEE

In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement, the Board has renamed the existing "Shareholders and Investors' Grievance Committee" as the "Stakeholders' Relationship Committee".

The terms of reference stipulated by the Board of Directors to the Stakeholders' Relationship Committee are as contained under clause 49 of the Listing Agreement.

Other details of Stakeholders Relationship Committee are as follows:

a) Name of non-executive director heading the committee: Mr. Atul Desai, Chairman

b) Name and designation of compliance officer: Nil

c) Composition and details of attendance of members of the Committee are as follows:

d) No. of meetings held:

Seven meetings of Stakeholders Relationship Committee were held on 04.04.2014, 11.07.2014, 05.09.2014, 12.09.2014, 10.11.2014, 19.12.2014 and 23.01.2015.

6. INDEPENDENT DIRECTORS COMMITTEE MEETING

The independent directors of the Company shall hold at least one meeting in a year without the attendance of non-independent directors and members of management. The meeting of Independent directors was held on 31st March 2015 and the following points were discussed:

- reviewed the performance of non-independent directors and the Board as a whole;

- reviewed the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;

- 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.

Composition:

The independent directors committee consists of the following 2 Directors as on 31.03.2015. Mr. Atul Desai - Chairman (Independent)

Mr. Ashok Jain - Member (Independent)

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTOR (CLAUSE 49 OF LISTING AGREEMENT)

The details of familiarization program (for independent directors) is disclosed on the Company's website and a web link thereto is <http://www.rmgalloysteel.com/userfiles/file/RMG%20Familiarisation%20policy.pdf>

DISCLOSURES

i. Disclosures on materially significant related party transactions -

- Transactions with related parties are disclosed in Note No. 32 of Notes forming part of the financial statements. None of these are in conflict with the interests of the Company.

ii. Details of non - compliance by the Company, penalties, strictures imposed on the company by the Stock Exchange or SEBI or any statutory authority, on any matter related to capital market during the last 3 years: Nil

iii. Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:

The Company has a Whistle Blower Policy and Vigil Mechanism for its directors and employees and no personnel have been denied access to the Audit Committee. A copy of policy is displayed on the website of the Company at www.rmgalloysteel.com

Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause-

The Company is in compliance with the mandatory requirements mentioned under Clause 49(II) to 49(XI) of the Listing Agreement to the extent applicable.

(i) Basis of Related Party transactions- Complied in Audit Committee meetings and Board meetings held during the financial year

(ii) Disclosure of Accounting Treatment - Accounting standards have been followed.

(iii) Board Disclosures - Risk Management - The Board of directors at their meeting held on 10th February 2015 reviewed risk assessment and minimization procedure followed by the Company. Risk assessment policy is posted on website of the Company.

(v) Proceeds from public issues, right issues, and preferential issues etc. - The Company has raised amount of Rs. 223149500 by allotment of 63,75,700 12% Redemable Preference Shares of Rs. 10/- each at a Premium of Rs. 25/ - each per share from Welspun Steel Limited on Preferential basis for operation/CAPEX requirement/to finance cost of scheme under modified draft rehabilitation Scheme.

(vi) Certification by CEO/CFO - Certificate obtained by Executive Director/CFO on the Financial Statements of the Company in terms of Clause 49 of the Listing Agreement was placed before the Board, who took note of it and took the same on record.

7. MEANS OF COMMUNICATION

i. Quarterly results and newspapers wherein results normally published:

The Board of Directors of the Company approves and takes on record the audited financial results for the year ended 31-03-2014, unaudited financial results for quarter ended 30-06-2014,30-09-2014 and 31-12-2014 in their quarterly meetings and the same were normally published in Economic Times (E+G), Ahmedabad edition within 48 hours from the date of Board meetings.

The said financial results were also displayed on the website of the company at www.rmgalloysteel.com  

8. GENERAL SHAREHOLDER INFORMATION:

The next Annual General Meeting shall be held at -

(i) Day and Date

- Wednesday, 30th September, 2015

Venue - Plot no. 1, GIDC Industrial Estate, Valia Road, Jhagadia,Dist. Bharuch, Gujarat,

Time - 12.30 P.M

(ii) Financial year

- from 1 st April 2014 to 31st March 2015

(iii) Date of Book Closure

- from Tuesday, 22nd September, 2015 to Thursday, 24th September, 2015 (both days inclusive)

(iv) Dividend payment date

- No dividend has been declared for the financial year 2014-15.

(v) Listing on Stock Exchanges and codes

The securities of the Company are listed on the Bombay Stock Exchange (Scrip code - 500365)

(vii) Registrar and Transfer Agent:

The transfer of shares of the Company are being done by Bigshare Services Pvt. Ltd., the R & T Agents, having address at E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai- 400 072.

Contact person: Mr. Ashok Shetty, Vice President

(viii) Dematerialisation of shares and liquidity:

The Shares of the Company are fully dematerialized under the category of compulsory delivery in dematerialized mode by all categories of investors.

 (ix) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and impact on equity:

The Company has not issued any GDRs/ADRs/Warrants or any Convertible instruments during the year.

(x) Plant Location:

Plot no.1, G.I.D.C Industrial Estate, Valia Road, Jhagadia, Dist - Bharuch.

(xi) Address for Correspondence :

Plot no.1, G.I.D.C Industrial Estate, Valia Road, Jhagadia, Dist - Bharuch, Tel No. 02645-619700, Fax No.:02645-619800

(xii) E-mail Id :

allcompanysecretaryofrmgl@welspun.com  

(xiii) Website :

www.rmgalloysteel.com