CORPORATE GOVERNANCE REPORT
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE :
Corporate Governance is a set of systems and practices to ensure that the affairs of the Company are being managed in a way which ensures accountability, transparency, fairness in all its transactions in the widest sense and meet its stakeholders aspirations and expectations. The Company will continue to focus its resources, strengths and strategies for enhancement of the long term shareholders' value while at the same time protecting the interest of other stakeholders.
2. BOARD OF DIRECTORS :
COMPOSITION AND CATEGORY
The composition of the Board of Directors of the Company represents an appropriate mix of executive and non-executive directors to ensure the independence of the Board and to separate the board functions of governance and management The Board currently comprises of Three Executive Directors and five Non-Executive Directors including the Chairman of the Board. None of the Directors on the Board is a member of more than ten Committees and Chairman of more than five Committees across all companies in which they are Directors.
The Board meets atleast once in a quarter to review the quarterly performance and the financial results. The Board meetings are generally scheduled well in advance and the notice of each Board Meeting is given in writing to each Director. To enable the Board to discharge its responsibilities effectively, the members of the Board are briefed at every Board Meeting on the overall performance of the company.
The Minutes of the Board meetings are circulated in advance to all Directors and confirmed at subsequent Meeting. The Minutes of Audit Committee and other Committees of the Board are regularly placed before the Board.
During the financial year ended March 31st, 2015, 4 Board Meeting were held respectively on 28.05.2014, 13.8.2014, 12.11.2014 and 14.02.2015. The gap between two Board Meetings did not exceed four months.
CODE OF CONDUCT
The Company has already adopted a code of conduct for all employees of the company and Executive directors. The board has also approved a code of conduct for the non-executive directors of the company. All board members and senior management personnel (as per clause 49 of listing agreement) have affirmed compliance with the applicable code of conduct has been provided in the Annual Report. The directors and senior management of the company have made disclosures to the board confirming that there are no material financial and/ or commercial transactions between them and the company that could have potential conflict of interest with the company at large.
3. COMMITTEES OF THE BOARD
The terms of reference of the Audit Committee are wide enough to cover matters specified for Audit Committees under Clause 49 of the Listing Agreements as well as in Section 177 of the Companies Act, 2013 besides other terms as may be referred to by Board of Directors from time to time.
The Audit Committee comprises of three non-executive Directors and two of them are Independent Directors.
During the period under review, four Audit Committee meetings were held respectively on 28.05.2014, 13.8.2014, 12.11.2014 and 14.02.2015.
SHAREHOLDERS'/INVESTORS' GRIEVANCE COMMITTEE:
Shri G M. Shaikh - Chairman, Shri Tejpal Shah and Shri Ashok Sharma are members of the Committee. The Committee is empowered to oversee the redressal of Investors' complaints and other miscellaneous complaints. The Company as a matter of policy disposes of investor complaints within a span of five working days.
Name and designation of Compliance Officer:
Shri Vinod Kumar Shah, Company Secretary
No. of shareholders' complaints received during the year : Nil
No. of complaints not resolved to the satisfaction of shareholders : Nil No. of pending Complaints : Nil
No. of complaints resolved during the year : Nil
A. POLICY ON RELATED PARTY TRANSACTIONS SCOPE AND PURPOSE OF THE POLICY
Related party transactions can present a potential or actual conflict of interest which may be against the best interest of the company and its shareholders. Considering the requirements for approval of related party transactions as prescribed under the Companies Act, 2013 ("Act") read with the Rules framed there under and Clause 49 of the Listing Agreement (as amended by SEBI Circulars dated April 17, 2014 and September 15, 2014), our Company has formulated guidelines for identification of related parties and the proper conduct and documentation of all related party transactions.
Also, Clause 49(VII)(C) of the Listing Agreement requires a company to formulate a policy on materiality of related party transactions and dealing with related party transactions. In light of the above, our Company has framed this Policy on Related Party Transactions ("Policy"). This Policy has been adopted by the Board of Directors of the Company based on recommendations of the Audit Committee. Going forward, the Audit Committee would review and amend the Policy, as and when required, subject to the approval of the Board.
OBJECTIVE OF THE POLICY
The objective of this Policy is to set out (a) the materiality thresholds for related party transactions and; (b) the manner of dealing with the transactions between the Company and its related parties based on the Act, Clause 49 of the Listing Agreement and any other laws and regulations as may be applicable to the Company.
MANNER OF DEALING WITH RELATED PARTY TRANSACTIONS
a) Identification of related parties:-
The Company has formulated guidelines for identification and updating the list of related parties as prescribed under Section 2(76) of the Act read with the Rules framed there under and Clause 49 of the Listing Agreement.
b) Identification of related party transactions:-
The Company has formulated guidelines for identification of related party transactions in accordance with Section 188 of the Act and Clause 49 of the Listing Agreement.
The Company shall disclose, in the Board's report, transactions prescribed in Section 188(1) of the Act with related parties, which are not in ordinary course of business along with the justification for entering into such transaction.
B. FAMILIARIZATION POLICY FOR INDEPENDENT DIRECTORS
PURPOSE AND OBJECTIVE OF THE POLICY
The Program aims to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company.
FAMILIARIZATION AND CONTINUING EDUCATION PROCESS
• The Company through its Managing Director / Executive Director / Key Managerial Personnel conducts programmes/ presentations periodically to familiarize the Independent Directors with the strategy, operations and functions of the Company.
• Such programmes/presentations provide an opportunity to the Independent Directors to interact with the Senior Management of the Company and help them to understand the Company's strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management and such other areas as may arise from time to time.
• The programmes/presentations also familiarize the Independent Directors with their roles, rights and responsibilities.
• When a new Independent Director comes on the Board of the Company, a meeting is arranged with the Chairperson, Managing Director, Chief Financial Officer to discuss the functioning of the Board and the nature of the operation of the Company's business activities.
• New Independent Directors are provided with copy of latest Annual Report, the Company's Code of Conduct, the Code of Conduct for Prevention of Insider Trading and the Code of Corporate Disclosure Practices, Schedule of upcoming Board and Committee meetings.
• The Company provides the Directors with the tours of company's facilities from time to time.
• A detailed Appointment Letter incorporating the role, duties and responsibilities, remuneration and performance evaluation process, insurance cover, Tata Code of Conduct and obligations on disclosures, is issued for the acceptance of the Independent Directors.
C. RISK MANAGEMENT POLICY LEGAL FRAMEWORK
Risk Management is a key aspect of the "Corporate Governance Principles and Code of Conduct" which aims to improvise the governance practices across the Company's activities. Risk management policy and processes will enable the Company to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities.
BACK GROUND AND IMPLEMENTATION
The Company is prone to inherent business risks. The objective of Risk Management Policy shall be identification, evaluation, monitoring and minimization of identifiable risks. This policy is in compliance with the amended Clause 49 of the Listing Agreement (W.e.F 1st October 2014) which requires the Company to lay down procedure for risk assessment and procedure for risk minimization. The Board of Directors of the Company and the Audit Committee shall periodically review and evaluate the risk management system of the Company so that the management controls the risks through properly defined network. Head of Departments shall be responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee.
The Company has not made Risk Management Committee but the Board of Directors & Audit Committee is looking after the Risk Management of the Company.
D. CORPORATE SOCIAL RESPONSIBILITY POLICY
India's new Companies Act, 2013 has introduced several new provisions which change the face of Indian corporate business. One of such new provisions is Corporate Social Responsibility (CSR). As per Section 135 of the Companies Act, 2013, it provides the threshold limit for applicability of the CSR to a Company i.e. (a) net worth of the company to be Rs 500 crore or more; (b) turnover of the company to be Rs 1000 crore or more; (c) net profit of the company to be Rs 5 crore or more.
Since company is a loss making company, CSR Policy is not applicable. Company has not made Corporate Responsibility Committee.
E. VIGIL MECHANISM POLICY LEGAL FRAMEWORK
Section 177 of the Companies Act, 2013 requires every listed company and such class or classes of companies, as may be prescribed to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed.
Effective October 1, 2014, Clause 49 of the Listing Agreement between listed companies and the Stock Exchanges, inter alia, provides for a mandatory requirement for all listed companies to establish a mechanism called "Whistle Blower Policy" for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the company's code of conduct.
In compliance of the above requirements, SHAH ALLOYS LIMITED, being a Listed Company has established a Vigil (Whistle Blower) Mechanism and formulated a Policy in order to provide a framework for responsible and secure whistle blowing/vigil mechanism.
The Vigil (Whistle Blower) Mechanism aims to provide a channel to the Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Codes of Conduct or policy. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. The mechanism provides for adequate safeguards against victimization of Directors and employees to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. This neither releases employees from their duty of confidentiality in the course of their work nor can it be used as a route for raising malicious or unfounded allegations about a personal situation.
F. SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (POLICY WHERE MORE THAN 4 WOMEN WORKING) AND ELIMINATION OF CHILD LABOUR POLICY.
It is the endeavor of the Company, to ensure a safe, secure and congenial work environment where employees and workers will deliver their best without any inhibition, threat or fear. In pursuance of this objective, the Company has evolved a "Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Policy".
The approach adopted by the Company is to spread awareness about the causes and consequences of sexual harassment at workplace and thereby prevent any occurrences. In the event of such an occurrence, the Group would use this Policy to provide the framework for action.
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Policy:
Sexual harassment in the work place has been defined as "unwelcome" sexually determined behavior (whether directly or by implication). It includes any or all of the following:
• Physical contact and advances
• A demand or request for sexual favors
• Sexually colored remarks
• Showing pornography
• Any other unwelcome physical, verbal or non-verbal conduct of a sexual nature.
• Sexual harassment will be deemed to have taken place if work is used as the excuse or occasion for repeated, personalized, offensive and unwelcome speech or gestures.
It is the duty of the Organization to prevent or deter acts of sexual harassment and if they take place, to provide procedure for resolution, encourage counseling, settlement or prosecution of acts of sexual harassment;
• Where the conduct of the employee would constitute an offence under the Indian Penal Code of any other law, the Shah Alloys Limited shall initiate legal action
• Where the conduct would in addition to an offence under law, constitute misconduct under the rules or regulations of the organization, Shah Alloys Limited shall initiate disciplinary action against him/her.
The concerns of or about employees can be reported without fear of reprisal or retaliation. Any allegations of sexual harassment will be investigated quickly and discreetly, and disciplinary action initiated as described in this policy. To the extent possible, the identity of the complainant, the victim, witnesses and the alleged harasser will be protected against unnecessary disclosure. All efforts will be made to ensure that proceedings remain confidential.
NON COMPLIANCE BY THE COMPANY, PENALTIES, STRICTURES:
The Company has complied with the requirements of the Stock Exchange/SEBI/any statutory authorities on all matters related to capital markets. There are no penalties or strictures imposed on the Company by Stock Exchange or SEBI.
5. CODE OF CONDUCT
The Company has its Code of Conduct which is applicable to Board of Directors as well as designated senior management personnel. The Code is circulated to all the members of the Board and management personnel and the compliance of the same is affirmed by them annually. An annual declaration of Whole Time Director, as to compliance of Code of Conduct has been provided in the Annual Report.
6. CERTIFICATE ON CORPORATE GOVENANCE
As required under Clause 49 of Listing Agreement, Certificate is provided in the Annual Report.
7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
This is given as a separate section in this Annual Report.
As required by clause 49 of the Listing Agreement, certification on financial statements is provided in the Annual Report.
9. COMPLIANCE WITH CLAUSE 49
Company is fully committed to the compliance of applicable mandatory requirement of Clause 49 of the Listing Agreement as amended from time to time. The company submits quarterly Compliance Report to BSE & NSE in respect of compliance of Clause 49 of the Listing Agreement
10. SECRETARIAL AUDIT
a. Pursuant to Clause 47 (c) of the Listing Agreement with the Stock Exchanges, certificates have been issued, on a half-yearly basis, by a Company Secretary in practice, certifying due compliance of share transfer formalities by the Company.
b. A Company Secretary in practice carries out a quarterly Reconciliation of Share Capital Audit, to reconcile the total admitted capital with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) and the total issued and listed capital. The audit confirms that the total issued/ paid-up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with NSDL and CDSL).
11. MEANS OF COMMUNICATION
a. All financial results are immediately sent to stock exchanges after being taken on record by the Board.
b. As per the requirements of Listing Agreement, Results are also published in leading daily local & English National newspapers namely Indian Express and Financial Express. The said results are also displayed at Company's web site.
c. The Company's website www.shahalloys.com contains a separate dedicated section named "Investors" where information for shareholders is available. Press releases, if any, are also displayed at Company's website as well as published in newspapers.
12. GENERAL INFORMATION FOR SHAREHOLDERS AND INVESTORS
The Company is registered in the State of Gujarat having Corporate Identification Number (CIN) as allotted by Ministry of Corporate Affairs (MCA) as L29199GJ2003PLC043148.
a) Annual General Meeting.
Date :24th September, 2015 Time : 05:00 P.M.
Venue : SAL Institute & Engineering Research, Opp. Science City, Ahmedabad: 380 060.
b) Financial Year
For accounting and financial reporting purpose, Company follows Financial Year which starts from 1st April each year and ends on 31st March of every succeeding year.
The Quarterly Results for the financial year 2015-16 will be taken on record by the Board of Directors as per the following schedule:
Quarter ending 30th June 2015 : By 14th August 2015
Quarter ending 30th September 2015 : By 14th November 2015
Quarter ending 31st December 2015 : By 14th February 2015
Quarter ending 31st March 2016 : By 14th May 2016
c) Date of Book Closure / Record Date :
16-09-2015 to 24-09-2015 (Both days inclusive)
d) Dividend Payment Date :
e) Listing on Stock Exchange
Bombay Stock Exchange Ltd.(BSE)
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400001 Scrip Code: 513436
National Stock Exchange of India Ltd (NSE)
"Exchange Plaza", Bandra Kurla Complex, Bandra (E), Mumbai - 400051 NSE SYMBOL: SHAHALLOYS Demat ISIN No. for NSDL and CDSL : INE640C01011
f) Listing Fees to Stock Exchanges
Company has paid listing fees in respect of financial year 2015-2016 to the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
g) Custodial Fees to Depositories
Company has paid Custodian Fees for the financial year 2015-16 to both depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
h) Dematerialization of Shares and Liquidity
On March 31st 2015, nearly 97.44% of the shareholders of Company were holding Company's shares in demat form. In the same way, Promoters & Promoters-group shareholding was also fully dematerialized. Also, the aggregate dematerialized shareholding of the Company stood at 97.44% of the total no. of shares.
i) Share Transfer System
All transfers of shares held in physical form are dealt by our Registrar and Share Transfer Agents. Presently the share transfers received in physical form are processed and registered within prescribed time periods (15) days from the date of receipt subject to the documents being valid and complete in all respects. Depositories control share transfers in Demat Mode. The Company obtains from a Company Secretary in Practice half yearly certificate of compliance in respect of compliance with share transfer formalities as required under Clause 47(c) of the Listing Agreement with Stock Exchanges and files a copy of the certificate with the stock exchanges.
j) Reconciliation of Share Capital Audit Report
As stipulated by Securities and Exchange Board of India, Company is required to carry out Reconciliation of Share Capital Audit (RSCA) from a practicing Company Secretary. This audit is carried out every quarter and the report thereon of Practicing Company Secretary is submitted to the stock exchanges. The audit, inter alia, confirms that the total listed and paid-up capital of the company is in agreement with the aggregate of the total number of shares in dematerialized form (held with NSDL and CDSL) and total number of shares in physical form.
k) Plant Location:
The Company's plant is located at:
2221/2222, Shah Industrial Estate, Sola-Kalol Road, Santej, Ta. Kalol, Dist. Gandhinagar - 382721
l)Registered & Administrative Offices:
Registered Office 5/1, Shreeji House, Behind M. J. Library, Ashram Road Ahmedabad - 380006, Gujarat
Corporate House, Sola-Kalol Road, Village Santej, Dist: Gandhinagar, Gujarat - 382721
m) Address for Investor Correspondence:
In case any problem or query shareholders can contact at:
Name : Company Secretary and Compliance officer
Address : Shah Alloys Corporate House, Sola-Kalol Road, Santej, Dist. Gandhinagar, Gujarat 382 721
Phone : 91-02764-661100/11 Fax : 91-02764-661110 Email : email@example.com
Shareholders may also contact Company's Registrar & Share Transfer Agent at:
Name : Bigshare Services Private Limited
Address : Plot no.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad, - 500 081.
Phone : 91-040-44655000 Fax : 91-040-23420859
Email : firstname.lastname@example.org Website : www.bigshare.com