Corporate Governance Report
(a) Company’s Philosophy
The philosophy of the Company in relation to corporate governance is to ensure transparency, disclosures and reporting that conforms fully with laws, regulations and guidelines, and to promote ethical conduct throughout the Organization, with the primary objective of enhancing shareholders value, while being a responsible corporate citizen. The Company is committed to conforming to the highest standards of corporate governance in the Country. It recognizes that the Board is accountable to all shareholders and that each member of the Board owes his/her first duty for protecting and furthering the interest of the Company.
(b) Board of Directors
As on 31st March, 2015, the Board of Directors comprised of a full time Chairman, 6 Whole Time Directors (i.e. Executive Directors) and 4 Non- Executive Directors (Non-ED) (including 2 Independent Directors). During the year, 12 Board meetings were held on 30.04.2014, 28.05.2014, 30.06.2014, 15.07.2014, 11.08.2014, 23.09.2014, 28.10.2014, 13.11.2014, 16.12.2014, 15.01.2015, 13.02.2015 and 24.02.2015. The names of Directors during 2014-15 their attendance at the Board meetings during the year as also at the last Annual General Meeting and number of other directorships held by each of them, as disclosed, are as follows:
(c) Audit Committee
1. Terms of Reference:
The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the Financial Reports; the Company’s systems of internal controls regarding finance, accounting and legal compliance that Management and the Board have established; and the Company’s auditing, accounting and financial reporting process generally.
The Audit Committee reviews reports of the Internal Auditors, meets Statutory Auditors, discusses their findings, suggestions and other related matters and reviews major Accounting Policies followed by the Company. The Audit Committee reviews with management, the Quarterly and Annual Financial Statements before their submission to the Board. The minutes of the Audit Committee meetings are circulated to the Board, discussed, and taken note of.
The Audit Committee of the Board was initially formed in 1998 and has been reconstituted from time to time. As on 31.03.2015, the Audit Committee consisted of Dr. Atmanand, Shri J.M. Mauskar and Shri S.S. Mohanty.
(d) HR Nomination & Remuneration Committee
i) Being a Government Company, the nomination and fixation of terms and conditions for appointment as Director is made by Government of India. However, the Company has constituted a Committee on HR, Nomination & Remuneration to, inter-alia, look into various HR issues, finalization of Performance Related Pay (PRP) for the executives of the Company in terms of Department of Public Enterprises Guidelines on Corporate Governance for Central Public Sector Enterprises, etc.
iii) The Non-Executive Directors (other than Government Nominee Directors) are paid only sitting fee of Rs.20,000/- for each Board/Board Sub-Committee Meeting attended by them.
iv) The salary of the Whole Time Directors is governed by pay scales and Rules of the Government. No variable incentive is being paid to the Directors except Performance Related Pay being paid to them on annual basis as per DPE guidelines.
v) Terms & Conditions
The Whole Time Directors are nominated by Government of India for appointment as Director for a period of five years or till the age of superannuation or until further order, whichever is the earliest. They are initially appointed by the Board of Directors as Additional Directors and, thereafter, by the Shareholders in the Annual General Meeting in terms of the provisions of the Companies Act, 1956/2013.
The appointment may, however, be terminated by either side on three months notice or on payment of three months salary in lieu thereof.
(e) Stakeholders Relationship Committee
(i) A Stakeholders Relationship Committee under the Chairmanship of an Independent Director, namely Dr. Atmanand and two Whole Time Directors, i.e. Director (Finance) and Director (Personnel), as Members, is functioning to consider and resolve the grievances of the security holders of the Company including complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividend, etc.
(ii) Name of Compliance Officer: Shri M.C. Jain, Company Secretary.
(iii) There was no complaint pending for redressal as on 31.03.2014. Number of shareholders complaints received during the year from 01.04.2014 to 31.03.2015 were 51. Out of these, 49 complaints were resolved and two complaints were pending for redressal as on 31.03.2015.
(f) Risk Management Committee:
The Company has constituted SAIL Risk Management Committee (SRMC) and the Chief Risk Officer of the Company is acting as the Secretary of the Committee. The Company has formulated a Risk Management Policy for dealing with different kinds of risks which it faces in the day to day operations. The Risk Management Policy is comprehensive and processes faster risk updation in a dynamic business environment. The SRMC oversees the risk management function in SAIL by addressing issues pertaining to policy formulation as well as evaluation of the risk management function to assess its continuing effectiveness.
(g) Corporate Social Responsibility (including Sustainability Development) Committee: Corporate Social Responsibility is the Company’s commitment to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner, whereby organisations serve the interests of the society by taking responsibility for the impact of their activities. The Board of Directors of the Company has constituted Corporate Social Responsibility Committee and has also approved Corporate Social Responsibility (CSR) Policy of the Company. The CSR policy has been disclosed on the website of the Company, www.sail.co.in
(h) In addition to the above, the following Board Sub-Committees have been constituted by the Company on specific matters, so that the issues are examined in detail before the same areplaced before the Board of Directors:
• Evaluation of Capital Schemes – To evaluate and recommend all proposals of Capital Schemes, requiring approval of the Board.
• Strategic Alliance(s) & Joint Ventures – To examine and recommend to the Board the issues relating to Strategic Alliance(s) and Joint Ventures of the Company.
• Projects Monitoring Committee - To examine and recommend to the Board the matters regarding implementation of major projects viz-a-viz approved plan.
• MOU Committee – To recommend to the Board targets to be fixed under the annual MOU to be signed with the Government and to evaluate the performance of the Company against the targets finalized under the MOU.
• Health, Safety & Environment – To review the Policy, Procedures, Systems, etc. on Health, Safety and Environmental matters and submit its recommendations to the Board.
• Technology Acquisition and Product Enrichment - Preparation of a Technology Vision and matters relating to Technology Acquisition and Product Enrichment
i) Pecuniary Relationship: There were no transactions by the Company of material nature with Promoters, Directors or the Management, their Subsidiaries, relatives, etc. that may have potential conflict with the interests of the Company at large. The Non-Executive Directors had no pecuniary relationships or transactions vis-à-vis the Company during the year except receipt of sitting fee for attending the meetings of the Board/Board Sub-Committee. None of the Non-Executive Directors held any share/convertible instrument of the Company.
ii) Maximum tenure of an Independent Director: SAIL being a Government Company, the nomination and fixation of terms and conditions for appointment of Independent Director is made by Government of India.
iii) Letter of appointment to Independent Directors: SAIL being a Government Company, Directors on its Board are nominated/appointed by the Government of India. No Independent Directors has been nominated by the Government of India on the Board of the Company, after commencement of Companies Act, 2013 w.e.f. 1.4.2014 and after coming into force of the relevant provisions of Clause 49 of the Listing Agreement, which became effective from 1.10.2014. The last appointment of Independent Directors in the Company was made on 18th July, 2013. However, whenever new Independent Director(s) will be appointed hereafter, the Company will issue the letter of appointment to such Directors. The letter of appointment would be issued based on the Terms and Conditions as would be mentioned by the Government of India, while nominating/appointing the Independent Directors.
iv) Familiarization programme for Independent Director: An induction cum familiarization programme for Independent Directors is organized on their appointment, where an overall view of the Company is presented to them which includes, inter-alia, details of Organization Structure, Company’s Plants & Units, Product portfolio, financial and operational performance, Modernization and Expansion Programme, etc.
v) There were no instances of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.
vi) The Company has adopted Whistle Blower Policy of Central Vigilance Commission (CVC) and it has not denied access to any personnel to approach the Audit Committee/ Management on any issues. The Whistle Blower Policy is available on the website of the Company - www.sail.co.in.
The Company has also formulated a Vigil Mechanism for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All employees of the Company and Directors on the Board of the Company are covered under this Mechanism. This Mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct. It also provides for adequate safeguards against the victimization of employees who avail of the Mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases. The Vigil Mechanism has been posted on the website of the Company - www.sail.co.in.
vii) The Company has complied with the mandatory requirements of Clause 49 of the Listing Agreement with the Stock Exchange and the Guidelines on Corporate Governance for Central Public Sector Enterprises issued by the Department of Public Enterprises, Government of India during the Financial Year 2014-15. However, there was shortfall in a few numbers of Independent Directors from 19.09.2014 onwards. SAIL being a Government Company, the Directors on its Board are appointed based on nomination by the Government of India. The matter of nominating the requisite number of Independent Directors on the Board of SAIL is under consideration of the Government. Further, the Company has not fully adopted non-mandatory requirements of the said Clause 49.
viii) A woman Director has been appointed before 31st March, 2015 i.e. within the time period prescribed under the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.
ix) Presidential Directives for revision of pay scales of Board level and below Board level executives in SAIL were issued by the Ministry of Steel vide file No.7(12)/2008-SAIL(PC) dated 5th October, 2009. The Company has complied with the same and also the Presidential Directives on reservation for SC/ST/OBC.
x) The Independent Directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
xi) Code of Conduct: The Board has laid down a Code of Conduct covering the requirements to be complied with by all the Board Members and Senior Management Personnel of the Company. An affirmation of compliance with the Code is received from them on annual basis. The Code of Conduct has been placed on the website of the Company – www.sail.co.in.
xii) Policy on Related Party Transactions: In terms of Clause 49 of the Listing Agreement, the Board of Directors of the Company has adopted a Policy on Related Party Transactions. The Policy is placed on the website of the Company – www.sail.co.in.
xiii) Policy on Material Subsidiaries: The Board of Directors of the Company has adopted a Policy with regard to determination of Material Subsidiaries. The Policy is placed on the website of the Company – www.sail.co.in. The Company did not have any Material Subsidiary during 2014-15.
xiv) The financial statements are signed by the Chairman and Director (Finance) of the Company, who are CEO and CFO respectively of the Company.
n) General Shareholders Information:
i) Annual General Meeting is proposed to be held on 24th September, 2015 at NDMC Indoor Stadium, Talkatora Garden, New Delhi-110001.
ii) Financial Year: 1st April, 2014 – 31st March, 2015.
iii) Date of Book Closure: 13th August, 2015 to 31st August, 2015 (Both days inclusive).
iv) The Company has paid Interim Dividend @ Rs.1.75 per share for the Financial Year 2014-15 on 13th February, 2015. Further, a Final Dividend @ Rs 0.25 per share has been proposed by the Board of Directors for the Financial Year 2014-15 subject to the approval of shareholders.
v) The shares of the Company are listed at the following stock exchanges: Bombay Stock Exchange Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Fort Mumbai-400001 (Stock Code No.500113)
The National Stock Exchange of India Limited, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (E). Mumbai- 400051 (Code: SAIL)
The London Stock Exchange, 10 Paternoster Square, London EC4M 7LS, UK The Annual Listing Fee for 2014-15 has been paid to each of the Stock Exchange(s).
vi) The monthly high and low quotes of the Company's shares during each month in the last Financial Year at the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) during the year 2014-15 are indicated below:
vii) Registrar and Share Transfer Agent
M/s. MCS Share Transfer Agents Limited, F-65, 1st Floor, Okhla Industrial Area Phase-I, New Delhi-110020 Phone No.011-41406149
viii) Share Transfer System
The equity shares of the Company is mandatorily traded in the dematerialized form. The Share Transfer Committee of the Board meets at regular intervals, to expedite the process of transfer of shares well within the time limit prescribed in this respect under the Listing Agreements.
• Bhilai Steel Plant, Bhilai-490001, Chhattisgarh
• Durgapur Steel Plant, Durgapur-713203, West Bengal
• Rourkela Steel Plant, Rourkela-769011, Orissa
• Bokaro Steel Plant, Bokaro Steel City-827001, Jharkhand.
• IISCO Steel Plant, Burnpur-713325, West Bengal
• Alloy Steels Plant, Durgapur-713208, West Bengal
• Salem Steel Plant, Salem-636013, Tamil Nadu
• Visvesvaraya Iron & Steel Plant, Bhadravati-577031, Karnataka
• Chandrapur Ferro Alloy Plant, Chandrapur, Maharashtra
• Central Coal Supply Organisation, Dhanbad-828127, Jharkhand
• Central Marketing Organisation, Ispat Bhawan, 40, Jawahar Lal Nehru Road, Kolkata-700071, West Bengal.
• Centre for Engineering & Technology, Ranchi-834002, Jharkhand.
• Environment Management Division, 6, Ganesh Chandra Avenue, (5th Floor), Kolkata-700013, West Bengal.
• Growth Division, 97, Park Street, Kolkata-700016, West Bengal.
• Management Training Institute, Ranchi-834002, Jharkhand.
• Raw Materials Division, 10, Camac Street, Industry House, Kolkata-700017, West Bengal.
• Research & Development Centre for Iron & Steel, Ranchi- 834002, Jharkhand.
• SAIL Consultancy Division, 16-20 Floor, SCOPE Minar, North Tower, Laxmi Nagar Distt. Centre, Delhi-110092.
• SAIL Safety Organisation, Ranchi-834002, Jharkhand.
• SAIL Refractory Unit, Bokaro-827001, Jharkhand
• IISCO-Ujjain Pipe & Foundry Company Limited, Kolkata (under liquidation).
• SAIL Jagdishpur Power Plant Limited, New Delhi-110003
• SAIL Refractory Company Limited, Salem-636013, Tamilnadu
• SAIL Sindri Projects Limited, Chasnala-828135, Jharkhand
• Chhattisgarh Mega Steel Limited, Chhattisgarh
xiii) Address for correspondence from shareholders for queries/ complaints, if any:
M/s. MCS Share Transfer Agents Limited, F-65, 1st Floor, Okhla Industrial Area, Phase-I, New Delhi-110020 Phone No.91-11-41406149, Fax No. 91-11-41709881 E-mail:firstname.lastname@example.org