REPORT ON CORPORATE GOVERNANCE
COMPAN Y’S PHILOSOP HY ON CORPORATE GOVERNANCE
The Company firmly believes that Corporate governance is an ethically driven business process that is committed to values and conduct aimed at enhancing an organization's wealth generating capacity. This is ensured by taking ethical business decisions and conducting the business with a firm commitment to values, while meeting stakeholders' expectations. Good governance practices stem from the culture and mindset of the organization and the Company is committed to meet the aspirations of all our stakeholders and believes in adopting best corporate practices for ethical conduct of business.
It is well recognized that an effective Board of Directors is a pre-requisite for strong and effective corporate governance. Our Board and Committees thereof are formed as per requirement of Companies Act, 2013 read with listing agreement which oversees how the Management serves and protects the long-term interests of all our stakeholders.
The company is in full compliance with the requirements of Corporate Governance under Clause 49 of the Listing Agreement with the Indian Stock Exchanges, which cast upon the Board of Directors and the Audit Committee, onerous responsibilities to improve the Company's operating efficiencies, the risk management and internal control functions have been geared up to meet the progressive governance standards.
Pursuant to Section 204 of the Companies Act, 2013, M/s. S. Chidambaram, Practicing Company Secretary has audited the Secretarial records and documents of the Company in respect of compliance with the Companies Act, 2013, Listing Agreement with the Indian Stock Exchanges and the applicable regulations and guidelines issued by Securities and Exchange Board of India and other applicable statutes. A copy of the Secretarial Audit Report for the period under review is a part of the Annual Report.
BOARD OF DIRECTORS
The Board of Directors along with its Committees consisting of seasoned professionals in diversified fields provide leadership and guidance to the Company's management as also direct, supervise and control the performance of the Company, besides advising on adoption of systems, best practices of management and oversight of compliance of various legal and other requirements.
COMPOSITION OF BOARD
The Board currently comprises of Seven Directors as categorized below.
• One Executive Director
• Four Independent Non-Executive Directors, one of whom is Woman Director.
• Two Non-Independent Non-Executive Directors.
INFORMATION PLACED BEFORE THE BOARD
Necessary information as required under the relevant statutes and as per the Listing Agreement are placed before the Board, from time to time. The Board periodically reviews compliance reports of all applicable laws as well as steps taken by the Company to rectify instances of non-compliance, if any. Draft Minutes are circulated amongst the members for their comments. The minutes of the meeting explicitly record dissenting opinions of the members, if any. The minutes of the proceedings of the Meeting are entered within thirty days of the conclusion of the meeting and thereafter signed by the Chairman.
ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS AND THE LAST ANNUAL GENERAL MEETING
Five Board Meetings were held during the year 2014-15. The dates of the meetings are as follows:
3rd May, 2014, 28th July, 2014, 27th September,2014, 31st October, 2014 and 30th January,2015.
Agenda Papers along with explanatory statements were circulated to the Directors in advance for each of these meetings. All relevant information as recommended by the SEBI on Corporate Governance as well as items required under Clause 49 of the listing agreement were placed before the Board from time to time.
ORIENTATION AND TRAINING TO BOARD MEMBERS
The Board members are given formal orientation and training with respect to the Company's vision, strategic direction, core values including ethics, corporate governance practices, financial matters and business operations. The Directors are facilitated to get familiar with the Company's functions at the operational levels. Periodic presentations and information are made at the Board and Committee Meetings, on business and performance updates of the Company, business strategy and risks involved.
The Board members are also provided with necessary documents / brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices.
I n terms of the requirement of the Companies Act read with Listing Agreement, the shareholders of the Company in the Annual General Meeting held on 27th September, 2014 had approved appointment of the Independent Directors to hold office for a term upto five consecutive years. The Company had issued formal letter of appointment to the Independent Directors which inter-alia explains the role, functions, duties and responsibilities expected from him/ her as Director of the Company. The brief terms and conditions for their appointment as Independent Directors is available on Company's website www.srikalahasthipipes . com. The Board on the recommendation of Nomination and Remuneration Committee had adopted Code for Independent Directors as enumerated in Scheduled IV to the Act as criteria for performance evaluation of the Independent Directors.
As mandated under the Act and the Listing Agreement, a separate meeting of all the Independent Directors of the Company was held on 30th January, 2015 without the attendance of non-independent directors and members of the Management. The Independent directors in the meeting inter-alia discussed the following:
a) Reviewed the performance of Non Independent Directors and the Board as a whole.
b) Reviewed the performance of the Chairman of the Company, taking into account the views of Executive Directors and NonExecutive Directors.
c) Assessed the quality, quantity and timeliness of flow of information between the Company's management and the Board that is necessary for the Board to be effective and reasonably perform their duties.
d) Scrutinized the performance of Management and monitored the reporting of performance.
e) Ensured an adequate and functional vigil mechanism was in place.
Disclosure regarding Appointment/ Re-appointment of Directors:
The brief information required to be disclosed under this Section is provided in the Notice of the Annual General Meeting.
The Audit Committee of the Company is constituted in line with the Listing Agreement read with Section 177 of the Act and Rules made therein. The terms of reference of the Audit Committee includes the powers as laid down in Clause 49(III)( C) and role as stipulated in Clause 49(111) (D) read with Section 177 of the Act and rules made therein. The Audit Committee also reviews the information as per the requirement of Clause 49 (III) (E) of the Listing Agreement read with Section 177 of the Act. The Audit Committee presently comprises two Independent Non-Executive Directors and a non-independent non-executive Director.
The Audit Committee reviews the Company's financial reporting processes, its financial statements, the accounting and financial policies & practices, the efficacy of the internal control mechanisms and monitor the management of risk, policies adopted by the Company and ensure compliance with the regulating guidelines, reports furnished by the Internal and Statutory auditors and ensure that suitable follow ups are taken.
The Audit Committee during the year ended 31st March, 2015 had four meetings on 3rd May, 2014, 28th July, 2014, 31st October, 2014 and 30th January, 2015.
The Audit Committee met on 30th April, 2015 for considering finalization of accounts for the year ended 31st March, 2015.
The Managing Director, Sr. General Mananger - Finance & Company Secretary, Statutory Auditors and Internal Auditors are generally present in the Audit Committee meeting as invitees.
Company Secretary acts as the Secretary to the Audit Committee.
Shri R.K. Khanna, Chairman of the Audit Committee attended the last Annual General Meeting of the Company held on 27th September, 2014.
NOMINATION & REMUNERATION COMMITTEE
The Nomination & Remuneration Committee of Srikalahasthi Pipes Limited ("the Company") was constituted on 3rd May, 2014 consisting of three Non-Executive Directors of which majority are Independent Directors. In order to align with the provisions of revised Clause 49 of the Listing Agreement, the Board at its meeting held on 27th September, 2014 reconstituted the Committee by appointing Mr.R.K.Khanna (Independent Director) as the Chairman of the Committee and the Board taken on record the Nomination and Remuneration Policy of the Company.
The Nomination and Remuneration Committee and the Policy are in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Clause 49 under the Listing Agreement.
The Key Objectives of the Committee would be:
a) To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.
b) To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.
c) To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.
REMUNERATION TO DIRECTORS
As recommended by Nomination & Remuneration Committee, the Board of Directors at its meeting held on 28th July, 2014 has approved increase in the remuneration payable by way of commission to the Managing Director from 3% to 5% of the net profits for the relevant financial year starting from the FY 2014-15, and payment of remuneration to nonexecutive Directors as may be decided by the Board every year not exceeding in aggregate 1% of the net profits of the Company for the relevant financial year starting from the FY 2014-15, which is within the overall limits prescribed under Sections 197 & 198 of the Companies Act, 2013.
Thus the Board at its meeting held on 30th April, 2015 approved remuneration to executive and non-executive directors as given in table hereunder. The total amounts with sitting fees for attending the meetings of the Board and its Committees paid to Executive and Nonexecutive directors is also given in the table below:
CODE OF CONDUCT
Code of Conduct for the Directors and Senior Management of the Company has been amended, pursuant to revised Clause 49 of the Listing Agreement to incorporate the duties of Independent Directors as enumerated in Schedule IV of the Companies Act, 2013. This Code has been laid down with a view to promote good corporate governance, exemplary personal conduct, fair competition, Corporate Social Responsibility, Safety, Health & Environmental performance, transparency and compliance of laws and regulations and this Code is applicable to all the Directors and
Senior Managerial Personnel of the Company. This Code is also available on the website of the Company www.srikalahasthipipes.com .
All the Board Members and senior management personnel have affirmed compliance with the Code on an annual basis and the declaration to the effect signed by the Managing Director is enclosed at the end of the Report.
PREVENTION OF INSIDER TRADING CODE
In pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (as amended), the Board has approved the 'Code of Conduct for Prevention of Insider Trading' and authorized the Audit Committee to implement and monitor the various requirements as set out in the Code.
Pursuant to Clause 49 of the listing agreement, it is hereby affirmed that the 'Code of Conduct for Prevention of Insider Trading' approved by the Board has been complied with during the year by the senior management of the Company. This policy is posted on the website of the Company.
WHISTLE BLOWER (MECHANISM) POLICY
Pursuant to Clause 49 of the listing agreement, the Company has put in place the 'Whistle Blower Policy' duly approved by the Board. Further, it is hereby affirmed that the Company has not denied any personnel access to the Audit Committee of the Company (in respect of matters involving alleged misconduct) and that the Company has provided protection to "Whistle Blowers" from unfair termination and other unfair or prejudicial employment practices. This policy is also posted on the website of the Company www.srikalahasthipipes.com .
STAKEHOLDERS RELATIONSHIP COMMITTEE
The composition of Stakeholders Relationship Committee is as follows:
Shri Gouri Shankar Rathi - Chairman
Shri S.Y. Rajagopalan - Member
Shri R.K. Khanna - Member
THE COMMITTEE ADMINISTERED THE FOLLOWING
a) Redress Shareholders' and Investors' complaints relating to non-receipt of balance sheet, transfer of shares, non-receipt of dividends etc.
b) Consolidate and sub-divide share certificate(s).
c) Approve transmission and issue of duplicate / fresh share certificate(s)
In accordance with Clause 49 para VIII(E) of the Listing Agreement ofthe Stock Exchanges, the Board has delegated powers of share transfers to M/s. Karvy Computershare Private Limited (KCPL), Karvy Selenium Tower B, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500 032. KCPL reviews share transfers every fortnight. All transfers, complaints, and other matters relating to shares are discussed at the board meeting every quarter.
d) Details of queries / complaints received and resolved during the year 2014-15:
As confirmed by M/s Karvy Computershare Private Ltd (RTA of the Company) the complaints are generally attended within 15 days from the date of receipt.
e) Details of un-claimed shares:
Pursuant to Clause 5A of the listing agreement, three reminders were sent to shareholders, at their registered address in respect of Shares lying un-claimed with the Company. The Company is in the process of opening of De-mat Suspense account and transferring all un-claimed shares to such account. As and when such shareholder(s) approach the Company, the Company will credit his/their shares lying in De-mat Suspense account to his/ their de-mat account(s) or issue share certificate, as the case may be, after proper verification. Shareholders who have not claimed such Share Certificates can write to the Company at its Registered Office or to the Registrar for doing further needful.
Shri A.R. Surana, Company Secretary, Rachagunneri-517641, Srikalahasthi Mandal, Chittoor District, AP., Ph: 08578-28665055, Fax: 08578-286657, E-mail: arsurana@ srikalahasthipipes.com and investors@ srikalahasthipipes.com.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The CSR Committee was constituted in terms of the requirement of Section 135 of the Companies Act 2013. The terms of reference of the Committee inter-alia are as follows:
a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of Companies Act, 2013 as amended from time to time, excluding the activities undertaken in pursuance of normal course of business of the Company;
b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
c) monitor the Corporate Social Responsibility Policy of the company from time to time.
d) Institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities to be undertaken by the Company, from time to time.
The CSR Policy of the Company is available on the Company's website www. srikalahasthipipes.com.
• The Company has generally complied with all the mandatory requirements as specified in the revised Clause 49 to the extent these apply and extend to the Company.
• Transactions with the related parties are disclosed in Note 34 of Notes on Accounts in Annual Report.
• No materially significant related party transactions were made that may have potential conflict with the interests of the Company at large.
• The Managing Director has given declaration to the Board that he has no personal interest in any material, commercial and financial transactions that may have any potential conflict with the interest of the Company at large.
• There were no strictures or penalties imposed by either SEBI or the Stock Exchanges or any statutory authority for non-compliance of any matter relating to Capital Market during the last three years.
• The CEO (Managing Director) and the CFO have furnished a Certificate to the Board for the year ended 31st March, 2015 in compliance with the revised Clause 49.IX of the Listing Agreement(s) as amended.
MEANS OF COMMUNICATION
Information like quarterly / half yearly / annual financial results and official press releases that have been announced from time to time is hosted on the Company's website www.srikalahasthipipes.com and has also been submitted to the Stock Exchanges to enable them to publish on their websites and communicate to their members. The quarterly / half-yearly / annual financial results are published in English and vernacular daily news papers. The Company is electronically filing specific documents / statements on the BSE's listing website www.listing.bseindia.com and NSE's Neaps website www.connect2nse.com .
Further, Management Discussion and Analysis is covered in the Directors' Report to the Shareholders, which forms a part of the Annual Report.
GENERAL SHAREHOLDERS' INFORMATION
The following information would be useful to our shareholders:
1. Annual General Meeting
– Date and Time 24th August, 2015 at 11.30 AM
– Venue At Registered Office:
Rachagunneri Village-517641, Srikalahasthi Mandal, AP.
2. Financial Calendar Tentative Schedule
Financial Reporting for the Quarter ended June 30, 2015 : End July, 2015.
Financial Reporting for the Quarter ended September 30, 2015:End October, 2015.
Financial Reporting for the Quarter ended December 31, 2015: End January, 2016.
Financial Reporting for the Quarter ended March 31, 2016:End April, 2016.
Annual General Meeting for the year ending March 31, 2016. End August, 2016.
3. Book Closure Date (Both days inclusive)
18th August, 2015 to 24th August, 2015.
4. Dividend payment date
28th August, 2015
5. Listing Details:
– Equity Shares Listed at Bombay Stock Exchange Ltd (BSE) &
National Stock Exchange of India Ltd. (NSE)
6. Stock Code
(BSE & NSE) 513605 & SRIPIPES
7. Demat ISIN Number for NSDL & CDSL
– Equity Shares INE943C01027
8. Corporate Identity Number
Registrar & Share Transfer Agents
M/s. Karvy Computershare Private Limited
(KCPL), Karvy Selenium Tower B, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally,Hyderabad-500 032.
Share Transfer System
The turnaround time for completion of transfer of shares in physical form is generally 15 days from the date of receipt, if the documents are clear in all respects.
DEMATERIALIZATION OF SHARES AND LIQUIDITY:
Since the Company has entered into an agreement with both the depositories namely NSDL and CDSL for dematerialization of its Shares, the Shareholders of the Company have the choice to dematerialize their shares and keep them in dematerialized form with any depository participant. About 98.25% of total equity share capital is held in dematerialized form with NSDL & CDSL as on 31st March, 2015.
OUTSTANDING CONVERTIBLE INSTRUMENTS
As on 31.3.2015, there are no outstanding convertible instruments.
REGISTERED OFFICE & WORKS
Rachagunneri-517641, Srikalahasthi Mandal, Chittoor District, A.P., India., Ph. No: 08578286650-655 (6 Lines)
MEMBERS CAN CONTACT US AT OUR REGISTERED OFFICE
As stated above.
STATUS OF NON-MANDATORY REQUIREMENTS
i) Audit Qualifications:
There are no qualifications or adverse remarks in the Auditor's Report which require any clarification / explanation. The notes to accounts forming part of the financial statements are self explanatory and needs no further explanation.
ii) Other Items:
The non-mandatory requirements viz., Shareholder Rights and other matters as mentioned in Annexure XIII to the Listing Agreement are implemented by the Company to the extent deemed necessary by the Board.
RECONCILIATION OF SHARE CAPITAL AUDIT
As stipulated by Securities and Exchange Board of India (SEBI), a qualified practicing Company Secretary carries out the Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to Stock Exchanges and is also placed before the Board of Directors. No discrepancies were noticed during these audits.