CORPORATE GOVERNANCE REPORT
At SUNFLAE STEEL, Corporate Governance has been an integral part of the way we have been doing our business since inception. We believe that good Corporate Governance emerges from the application of the best and sound management practices and compliance with the laws coupled with adherence to the highest standards of transparency and business ethics. These main drivers, together with the Company's ongoing contributions to the local communities through meaningful "Corporate Social Responsibility" initiatives will play a pivotal role in fulfilling our renewed vision to be the most sustainable and competitive Company in our industry and our mission to create value for all our stakeholders.
Your Company has already implemented the Code of Corporate Governance as prescribed by SEBI in terms of amended Clause 49 of the Listing Agreement with the Stock Exchange(s). As per the amended / revised Clause 49 of Listing Agreement, your Company has approved 'SISCO Code of Business Principles and Conduct' for Board members as well as members of Senior Management and the same are posted on the Company's website also. The Company is also following the 'SISCO Code for Prevention of Insider Trading' as per SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended and SEBI (Prohibition of Insider Trading) Regulations, 2015. Also, the Company has implemented Corporate Social Responsibility Policy and Whistle Blower Policy at its place in compliance with the Companies Act, 2013 and formulated the committees accordingly.
The detailed compliance report on the Corporate Governance for the year 2014 - 2015 is as follows :
1) SUNFLAG PHILOSOPHY ON CORPORATE GOVERNANCE
The Board of Directors and Management of Sunflag Iron and Steel Company Limited commit themselves to :
i) Strive hard towards enhancement of shareholders' value through
- sound business decisions,
- prudent financial management and
- high standard of ethics throughout the organisation.
ii) Ensure transparency and professionalism in all decisions and transactions of the Company.
iii) Achieve excellence in Corporate Governance by
- conforming to and exceeding wherever possible, the prevalent mandatory guidelines on Corporate Governance.
- regularly reviewing the Board processes and management systems for further improvement.
iv) Ensure safety, health and environment management by making it an integral part of the Company's business strategy and to actively promote awareness of safety, health and environment issues throughout the Company and to our business partners.
v) Implement, maintain and continuously improve an environment management system.
vi) Achieve excellence in all activities by implementing Total Productive Maintenance (TPM) with the involvement of all employees to reduce cost, increase productivity & improve quality continuously with the aim of achieving "Zero Failure, Zero Defect and Zero Accident"
2) BOARD OF DIRECTORS
Note : During the financial year under review :
IDBI Bank Limited has withdrawn nomination of Mr. Sonam Bodh (DIN : 06731687) from the Board and instead nominated Mr. P. K. Das (DIN :06593113 (Chief General Manager - RBG, IDBI Bank Limited, Nagpur), effective 12th December 2014. Further, IDBI Bank Limited has also withdrawn nomination of Mr. P. K. Das (DIN : 06593113), effective 11th February 2015. The Board places on record its appreciation for valuable services and wide contributions made by Mr. Sonam Bodh and Mr. P. K. Das during their respective tenure as a Nominee Director/s of the Company.
In compliance with the provisions of the Companies Act 2013 and Listing Agreements entered with Stock Exchange/s, Mr. Kumar Jitendra Singh (DIN : 00626836) and Mrs. Neelam Kothari (DIN : 06709241) (Woman Director) were appointed as a Non-executive, Independent Director/s effective 5th August 2014 and 29th September 2014 respectively.
b) Meetings, agenda and proceedings etc. of the Board of Directors :
Attendance at the Board Meetings; last Annual General Meeting and details of membership / partnership of Directors in other Boards.
• Eight (8) meetings of the Board of Directors were held on 21.05.2014, 09.07.2014, 05.08.2014, 11.09.2014, 26.09.2014, 07.11.2014, 06.02.2015 and 19.03.2015 during the financial year under review.
c) Separate Meeting of Independent Directors :
As stipulated by the Sechule - IV Code of Independent Directors under the Companies Act, 2013 and the Listing Agreement, a separate meeting of the Independent Directors of the Company was held on 19th March, 2015 to review the performance of Non-independent Directors (including the Chairman) and the Board as whole. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform and discharge their duties.
d) Appointment of Woman Director :
As per the provisions of the Companies Act 2013, the Company has appointed Mrs. Neelam Kothari - DIN : 06709241, a qualified Chartered Accountants and Cost Accountants from Mumbai on the Board of the Company as an Additional Director -Non-executive, Independent effective 29th September, 2014 and her office of Directorship will be confirmed at the ensuing Annual General Meeting.
e) Induction & Training of Board Members :
On appointment, a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments was issued to the concerned Director/s. Every such newly appointed Director is taken through a formal induction program including the presentation from the Managing Director & CEO on the Company's manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Director/s about their legal and regulatory responsibilities as a Director. The induction for Director/s include interactive sessions with Executive Committee Members, Business and Functional Heads, visit to the manufacturing site etc. On the matters of specialized nature, the Company engages outside experts/consultants for presentation and discussion with the Board members.
f) Evaluation of the Board's Performance :
During the year, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, governance issues, etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board Chairman who were evaluated on parameters such as attendance, contribution at the meetings, independent judgement, safeguarding of minority shareholders interest, and otherwise, etc.
The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
g) Agenda :
All the meetings are conducted as per well designed and structured agenda. All the agenda items are backed by necessary supporting information and documents (except for the critical price sensitive information, which is circulated at the meeting) to enable the Board to take informed decisions. Agenda also includes minutes of the meetings of all the Board, Committees and Subsidiaries for the information of the Board. Additional agenda items in the form of "Other Business" are included with the permission of the Chairman. Agenda papers are generally circulated seven days prior to the Board Meeting. In addition, for any business exigencies, subject to provisions of the Act, the resolution/s are passed by circulation and later placed in the ensuing Board Meeting for ratification / approval.
The Companies Act, 2013 read with the relevant rules made there under, now facilitates the participation of a Director in Board / Committee Meetings through video conferencing or other audio visual mode. Accordingly, the option to participate in the meeting through video conferencing (subject to technical aspects) was made available for the Directors except in respect of such meetings / items which are not permitted to be transacted through video conferencing.
The Board periodically reviews the items required to be placed before it and in particular, reviews and approves quarterly/half yearly unaudited financial statements and the audited annual financial statements, corporate strategies, business plans, annual budgets, projects and capital expenditure. It monitors overall operating performance, progress of major projects and review such other items which require Board's attention. It directs and guides the activities of the management towards the set goals and seeks accountability. It also sets standards of corporate behaviour, ensures transparency in corporate dealings and compliance with laws and regulations. The agenda for the Board meeting covers items set out as guidelines in Clause 49 of the Listing Agreement to the extent these are relevant and applicable to the Company.
h) Invitees & Proceedings :
Apart from the Board members, the Company Secretary is Secretary to Board and all Committees and the Chief Financial Officer (CFO) is invited to attend the Board Meetings. Other senior management executives are called as and when necessary, to provide additional inputs for the items being discussed by the Board. The CFO makes presentation on the quarterly and annual operating - financial performance and capital expenditure budget. The Managing Director, CFO and other senior executives make presentations on capital expenditure proposals & progress, operational health & safety and other business issues. The Chairman of various Board Committees brief the Board on all the important matters discussed & decided at their respective committee meetings, which are generally held prior to the Board meeting.
i) Post Meeting Action :
Post meetings, all important decisions taken at the meeting are communicated to the concerned officials and departments. Action Taken Report is prepared and reviewed periodically by the Company Secretary for the action taken / pending to be taken.
j) Support and Role of Company Secretary :
The Company Secretary is responsible for convening the Board and Committee meetings, preparation and distribution of Agenda and other documents and recording of the Minutes of the meetings. He acts as interface between the Board and the Management and provides required assistance and assurance to the Board and the Management on compliance and governance aspects.
k) BRIEF PROFILE OF DIRECTORS
Mr. P. B. Bhardwaj - Non-Executive Chairman (DIN : 00136076)
Mr. P. B. Bhardwaj, 78, Non-executive Chairman, is from the renowned Industrial family. He was instrumental in setting up the state of the art integrated Steel plant of Sunflag Iron and Steel Company Limited at Warthi, Bhandara Road, Bhandara in the state of Maharashtra and is associated with the Company since its inception in the year 1984. He has rich and varied experience in various fields of steel, textiles, knitting etc. He is Chairman in Share transfer committee of the Company. He is not holding any equity shares in the capital of the Company.
Mr Ravi Bhushan Bhardwaj - Vice-Chairman & Managing Director (DIN : 00054700)
Mr. Ravi Bhushan Bhardwaj, 72, hails from a renowned family of industrialists and an industrial entrepreneur himself. He has vast experience in various industries and particularly, Steel and Textile industry. He is associated with the Company since its inception and since year 1998, working as the Vice-Chairman and Managing Director of the Company.
Subject to the superintendence, control and direction of the Board of Directors, Mr. Ravi Bhushan Bhardwaj was overall in-charge of running the business affairs of the Company. As a Vice-Chairman & Managing Director, he had successfully led the Company by his unstinted efforts and wide contributions, which resulted into a turnaround overall performance. The Company had made remarkable growth under his leadership. He is Chairman of Corporate Social Responsibility (CSR) Committee and member of Share Transfer Committee; Stakeholders' Relationship Committee and Nomination & Remuneration Committee and as an Invitee to Audit Committee of the Company. He is holding 700,000 (0.39%) equity shares in the capital of the Company.
Mr Pranav Bhardwaj - Joint Managing Director (DIN : 00054805)
Mr. Pranav Bhardwaj, 42, is a British National and person of India origin. He has graduated as B.Sc. Majoring in Chemistry and Business Management (Joint Honors Degree) from the world renowned Imperial College of London. He is a member of Stakeholders' Relationship Committee and Share Transfer Committee of the Company. He is holding 912,140 (0.51%) equity shares in the capital of the Company. He is also holding the position of Vice-Chairman at the prestigious The Alloy Steel Producers Association of India (ASPA).
Dr. E.R.C. Shekar - Non-Executive, Independent Director (DIN : 00013670)
Dr. E.R.C. Shekar, 83, is graduated in the Metallurgical Engineering and awarded Doctorate in that field. He was the Managing Director of Steel Authority of India Limited (SAIL). He has gained nearly five decades of experience in steel making and marketing. He is associated with Sunflag since 1991 as Non-executive, Independent Director. He is Chairman of the Audit Committee, Nomination & Remuneration Committee, Stakeholders' Relationship Committee and Risk Management Committee and also a member of Share Transfer Committee and Corporate Social Responsibility Committee of the Board. He is holding 2,000 (0.001%) equity shares in the capital of the Company.
Mr. S. Gajendran - Non-Executive, Independent Director (DIN : 00250136)
Mr. S. Gajendran, 71, is graduated from Madras University as Electrical Engineer and started his career with Bharat Earth Movers Limited, Bangalore in 1969. After that, he joined Tamilnadu Electricity Board in 1970 and served the Board in various capacities in rural areas and Chennai. He then joined IDBI in 1979 and served in various capacities and handling projects appraisal, follow-up of large industrial concerns, etc. He retired from IDBI services in year 2004 as a Director JNIDB.
He is associated with Sunflag effective 16th June, 2008 as a Non-executive, Independent Director. Presently, he is a member of Audit Committee, Nomination & Remuneration Committee and Stakeholders' Relationship Committee of the Company. He is not holding any equity shares in the capital of the Company.
CA Jayesh M Parmar - Non-Executive, Independent Director (DIN : 00802843)
CA Jayesh M Parmar, 50, a Fellow Member of the Institute of the Chartered Accountants of India (the ICAI), in Practice as a Chartered Accountant, a Partner with M/s. Kanu Doshi Associates, Chartered Accountants, Mumbai since year 1993. He is a member of Audit Committee and Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee of the Board. He is not holding any equity shares in the capital of the Company.
Mr. Kumar Jitendra Singh - Non-Executive, Independent Director (DIN : 00626836)
Mr. Kumar Jitendra Singh, 63, is B.Sc. Engineering (Mechanical) from Bihar College of Engineering and pursued Bachelor of Law from Ranchi University. He was awarded fellowship in research from CSIR in 1976. His last position held was Chairman cum Managing Director (CMD) of MOIL Limited from 16th March, 2009 to 31st October, 2012 before retiring. He has more than 31 years of experience in varied industries such as maintenance of Steel Plant, project management / equipment procurement for steel plant, refractory industry / refractory application & management in steel plants, metal & mining industry etc. He is not holding any equity shares in the capital of the Company.
Mrs. Neelam Kothari - Non-Executive, Independent Director (DIN : 06709241)
Mrs. Neelam Kothari is a qualified Chartered Accountant and Cost Accountant, also stood rank in both the professional examinations. She has earlier worked with IDBI Bank Limited from 1993 to 2009 in various capacities. During her career spanning across 15 years, she rose from a management trainee to one of the youngest Deputy General Manager in the IDBI Bank. She is not holding any equity shares in the capital of the Company.
Mr. Surendra Kumar Gupta - Whole-time Director designated as Director & CEO (DIN : 00054836)
Mr. Surendra Kumar Gupta is graduated in Mechanical Engineering (B.E.) and thereafter pursued Diploma in Business Management. He has wide experience of over 37 years in Steel & Steel making industry. He was appointed as Whole-time Director in July, 2007 designated as Director & CEO of the Company. He is member of Share Transfer Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility Committee, Nomination & Remuneration Committee and Risk Management Committee of the Company. He is not holding any equity shares in the capital of the Company.
3) AUDIT COMMITTEE
a) Constitution :
The Board has constituted a well-qualified Audit Committee with Dr. E.R.C. Shekar as the Chairman of the Committee. All the members of the Committee are Non-Executive Directors with majority of them are Independent Directors including Chairman of the Committee. They possess sound knowledge of accounts, audit, finance, taxation, internal controls etc.
b) Terms of Reference :
The terms of reference of the Audit Committee are as per the guidelines set out in the Listing Agreement with the Stock Exchange/s read with Section 177 of the Companies Act, 2013. These broadly includes :
a) the recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
b) review and monitor the auditor's independence and performance, and effectiveness of audit process;
c) examination and reviewing of the financial statement and the auditors' report thereon before submission to the board for approval, with particular reference to :
i) matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of Section 217(2AA) of the Companies Act, 1956 and/or Section 134(3)(c) of the Companies Act, 2013;
ii) changes, if any, in accounting policies and practices and reasons for the same;
iii) major accounting entries involving estimates based on the exercise of judgment by management;
iv) significant adjustments made in the financial statements arising out of audit findings;
v) compliance with listing and other legal requirements relating to financial statements;
vi) disclosure of any related party transactions;
vii) qualifications in the draft audit report;
d) examination and reviewing, with the management, the quarterly financial statements before submission to the board for approval;
e) approval or any subsequent modification of transactions of the Company with related parties; f ) scrutiny of inter-corporate loans and investments;
g) valuation of undertakings or assets of the Company, wherever it is necessary;
h) evaluation of internal financial controls and risk management systems;
i ) monitoring the end use of funds raised through public offers and related matters;
j) oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
k) reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
l) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
m) discussion with internal auditors of any significant findings and follow up thereon;
n) reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
o) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
p) look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
q) approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
r) reviewing the Management discussion and analysis of financial condition and results of operations;
s) reviewing the Management letters / letters of internal control weaknesses issued by the statutory auditors;
t) reviewing the Internal audit reports relating to internal control weaknesses;
u) reviewing the appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee;
v) reviewing the functioning of the Whistle Blower mechanism;
w) reviewing / redressal of complaint/s under the Sexual Harassment of Women at Workplace (Prohibition, Prevention & Redressal) Act, 2013;
x) establishment of a vigil mechanism for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy in such manner as may be prescribed, which shall also provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases:
y) such other functions / activities as may be assigned / delegated from time to time by the Board of Directors of the Company and/or pursuant to the provisions of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement."
c) Composition :
Chairman : Dr. E.R.C. Shekar - Independent Director
Members : Mr. S. Gajendran and CA Jayesh M Parmar (Independent Directors) and Mr. Sonam Bodh (Nominee - IDBI Bank Limited) (up to 12.12.2014)
Secretary : CS Mukesh D. Parakh, Company Secretary (up to 05.08.2014)
Secretary : CS Pranab Panigrahi, Company Secretary (effective 05.08.2014)
d) Invitees / Participants :
i) Mr. Ravi Bhushan Bhardwaj, Vice-Chairman & Managing Director and Mr. Surendra Kumar Gupta, Director & CEO are the permanent invitee to the Committee.
ii) Internal auditors attended two (2) Audit committee meetings and briefed the committee on all the points covered in the Internal audit report as well as the other issues that come up during discussions.
iii) The Statutory auditors have attended all the Audit committee meetings held during the year.
iv) The Cost Auditors have attended 3 (three) Audit committee meetings.
e) Meetings and Attendance :
Four (4) meetings of the Audit Committee were held on 21.05.2014, 05.08.2014, 07.11.2014 and 06.02.2015 during the financial year.
• The Audit Committee held discussions with the Statutory auditors on the audit of the quarterly / half-yearly / yearly accounts, the yearly audit plan, matters relating to compliance of Accounting standards & policies, their observations arising from the Audit of the Company's financial statements and other related matters.
• The Audit Committee during their four (4) meetings reviewed with the Management and the Auditors (both external and internal) all issues which are required to be reviewed by the Audit Committee pursuant to the Company's Act, 2013 and the Listing Agreement with the Stock Exchange/s. The Audit Committee has also reviewed the observations of the Internal and Statutory auditors in relation to all areas of operations of the Company as also the internal control systems. The Audit Committee has also reviewed the actions taken by the Company on various observations and queries of the auditors.
4) NOMINATION & REMUNERATION COMMITTEE
a) Nomination and Remuneration committee consists of following Directors viz. Chairman : Dr. E.R.C. Shekar - Independent Non-executive Director
Members : Mr. S. Gajendran and CA Jayesh M. Parmar, (Independent, Non-executive Directors) and Mr. Sonam Bodh
(Nominee - IDBI Bank Limited) (up to 12.12.2014); and Executive Directors Mr. Ravi Bhushan Bhardwaj, Vice Chairman & Managing Director and Mr. Surendra Kumar Gupta, Director & CEO of the Company.
Secretary : CS Mukesh D. Parakh, Company Secretary (up to 05.08.2014)
Secretary : CS Pranab Panigrahi, Company Secretary (effective 05.08.2014)
b) Terms of Reference of the Nomination & Remuneration Committee :
The Committee is empowered to
a) identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance;
b) formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees;
c) while formulating the policy under (b) above, ensure that
i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
iii) remuneration to directors, key managerial personnel and senior management involves a balance between fixed & incentive pay reflecting short & long-term performance objectives appropriate to the working of the company & its goals:
(d) such other functions / activities as may be assigned / delegated from time to time by the Board of Directors of the
Company and/or pursuant to the provisions of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014."
For Executive Director(s) :
The total remuneration of Executive Directors consists of :
• a fixed component - consisting of salary and perquisites; the perquisites and benefits are in line with Company's Rules.
• Commission @ 2% on net profits paid to each Managing Director and Joint Managing Director respectively.
• No commission is paid to Whole-time Director of the Company.
• No sitting fees paid to Executive Directors for attending Board / Committee Meetings.
Further, as the policy matter, the Company adheres to and follows the related provisions of the Companies Act 2013 with relevant schedule & rules made thereunder thereof for payment of remuneration to the Key Managerial Personnel, wherever applicable adhered the decision of Committee / Board of the Company.
ii) For Independent Director(s)
The committee looks after the selection of candidates to be recommended for appointment as Independent Director on the Board of the Company.
The Sitting Fees @ X 7500/- and @ X 3000/- per meeting of the Board and Committee thereof, as the case may be, respectively have been paid together with reimbursement of actual travel and out-of-pocket expenses incurred for attending such meetings.
Commission to Independent Director/s and Non-executive Chairman :
The members at its 25th Annual General Meeting held on 23rd September, 2011 has approved the payment of remuneration by way of commission @1% of the Net Profits to Non-executive Director/s or some or any of them in such amounts or proportions and in such manner and in all respects as may be decided and directed by the Board of Directors of the Company.
In turn, the Board of Directors of the Company has resolved the distribution of payment of remuneration by way of commission @1% of the Net Profits i.e. Rs. 31,00,243/- to Independent Director/s and Non-executive Chairman details as below :
In turn, the Board of Directors of the Company has resolved the distribution of payment of remuneration by way of commission @1% of the Net Profits i.e. Rs. 31,00,243 /- to Independent Director/s and Non-executive Chairman as follows :
Dr. E.R.C. Shekar : Rs. 100,000 Mr. S. Gajendran : Rs. 100,000 CA Jayesh M Parmar : Rs. 100,000 Mr. K.J. Singh : Rs. 65,000 *
Mrs. Neelam Kothari : Rs. 50,000 * IDBI (Nominee) : Rs. 87,000 * and the balance amount of Rs. 2,598,243/- be payable to Mr. P.B. Bhardwaj, Non-Executive Chairman of the Company.
5) STAKEHOLDERS' RELATIONSHIP COMMITTEE
During the year under review, the nomenclature of the Shareholders' /Investors' Grievance Committee was changed to "Stakeholders' Relationship Committee", in line with the provisions of Section 178 of the Companies Act, 2013 w.e.f. 5th August, 2014.
This Committee is responsible for the satisfactory redressal of investors' complaints and recommends measures for overall improvement in the quality of investor services. Especially it looks after grievances of shareholders and investors Complaints like dematerialisation / rematerialisation of shares, transfer of shares, transmission of shares, non-receipt of share certificates and/or balance sheet, dividend(s) etc. and timely redressal of their grievance thereto.
The Stakeholders Relationship Committee is consisting of Dr. E.R.C. Shekar, Independent Director as its Chairman, and Mr. Ravi Bhushan Bhardwaj, Mr. Pranav Bhardwaj, Mr. S. Gajendran and Mr. Surendra Kumar Gupta, as the committee members while CS Mukesh D Parakh, was Secretary to the Committee (up to 05.08.2014) and CS Pranab Panigrahi, is Secretary to the Committee (effective 05.08.2014).
During the financial year, the committee had four (4) meetings and reviewed :
a) the system of handling with and responding to complaints received from the Shareholders and investors.
b) The complaint letters received from Shareholders / Investors, Stock Exchanges, SEBI, Depositories viz. NSDL & CDSIL and responses thereto.
Additional Information :
All complaints as of 31st March, 2015 have been attended to and suitably replied / resolved and redressed accordingly.
6) SHARE TRANSFER COMMITTEE
The Share Transfer Committee consists of five (5) members, viz. two (2) Non-executive Directors and three (3) Executive Directors, as per details given below :
Chairman : Mr. P B Bhardwaj, Non-executive Director
Members : Mr. Ravi Bhushan Bhardwaj, Mr. Pranav Bhardwaj and Mr. Surendra Kumar Gupta - Executive Directors; Dr. E.R.C. Shekar, Independent Director
The Securities and Exchange Board of India (SEBI) vide its Circular bearing reference No. CIR/MIRSD/8/2012 dated 5th July, 2012, in view to expedite the share transfer process in the interest of investors and in consultation with Stock Exchanges, has reduced the time-line for registration of transfer of Equity Shares by the Listed Companies to fifteen (15) days.
In view of above, Board considered and granted the authorisation (sub-delegation) to CS Pranab Panigrahi (earlier CS Mukesh D Parakh), Company Secretary of the Company and/or CA R. Muralidhar, Executive Director (Finance) to approve all the transfer/ transmission / transposition / deletion of name / rematerialisation of shares / issue of duplicate shares / consolidation & splitting of shares and ratify dematerialisation of shares on weekly basis to comply with the directions issued by the SEBI. The Board has authorised Share Transfer Committee to ratify all the approvals all routine transfers and transmission and rematerialisation of shares and ratifications dematerialisation of shares carried out by the Company Secretary / Executive Director (Finance) of the Company on quarterly basis. As on 31st March 2015, there was no request for transfer of shares pending at the end of the quarter / year.
Other Information :
a) As per the new Clause 47(f), the Company has created a designated e-mail ID for the Investor Grievances / Complaints as firstname.lastname@example.org The required information had been sent to concerned Stock Exchanges also and displayed at Company's website www.sunflagsteel.com
b) The Securities and Exchange Board of India (SEBI) vide its Circular reference CIR/MRD/DP/10/2013 dated 21st March, 2013 has directed the Listed Companies for the usage of electronic modes for making cash payments to the investors and further asked to maintain the proper Bank Mandate / ECS Records of the investors.
In view of this, those shareholders who have not yet furnished / updated their Bank / ECS particulars, may kindly register the same with the Company / RTA, if shares are held in physical mode and with their Depository Participant (DP), if the shares are held in demat mode.
c) Pursuant to Clause 5-A of the Listing Agreement/s entered into with the Stock Exchange/s, the Company has transferred 28,050 equity shares to "Unclaimed Suspense Account" effective 3rd August 2015, as these shares were lying unclaimed since dates of allotment. Shareholders of these unclaimed shares can contact the Company to claim their shares and their list is available on the Company's website www.sunflagsteel.com
7) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee as required under Section 135 of the Companies Act, 2013
The Terms of Reference of the Committee are as follows :
i. formulate and recommend to the Board, a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 as amended from time to time;
ii. recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
iii. monitor the Corporate Social Responsibility (CSR) Policy of the Company from time to time;
iv. such other functions / activities as may be assigned / delegated from time to time by the Board of Directors of the Company and/or pursuant to the provisions of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014."
8) RISK MANAGEMENT COMMITTEE (RMC)
The revised Clause 49 of the Listing Agreement mandates constitution of the Risk Management Committee (RMC). The Committee is required to lay down the procedures to inform to the Board about the risk assessment and minimization procedures and the Board shall be responsible for framing, implementing and monitoring the risk management plan of the Company.
Business Risk Evaluation and Management (BREM) is an ongoing process within the organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. The objectives and scope of the Risk Management Committee broadly comprises :
a) Oversight of risk management performed by the executive management; Reviewing the BREM policy and framework in line with local & legal requirements and SEBI guidelines;
b) Reviewing risks and evaluate treatment including initiating mitigation actions and ownership as per a pre-defined cycle;
c) Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.
Within its overall scope as aforesaid, the Committee shall review risks trends, exposure, potential impact analysis & mitigation plan.
The Committee reviewed the risk trend, exposure and potential impact analysis carried out by the management. It was specifically confirmed to the Committee by the Vice-Chairman & Managing Director, Cheif Executive Officer and the Chief Financial Officer that the mitigation plans are finalised and up to date, owners are identified and the progress of mitigation actions are monitored. The Risk Management Committee met once in the Financial Year.
9) VIGIL MECHANISM / WHISTLE BLOWER POLICY
With the rapid expansion of business in terms of volume, value and geography, various risks associated with the business have also increased considerably. One such risk identified is the risk of fraud & misconduct. The Audit Committee is committed to ensure fraud-free work environment and to this end the Committee has laid down the Whistle Blower Policy providing a platform to all the employee, vendors and customers to report any suspected or confirmed incident of fraud / misconduct through any of the reporting protocols as mentioned in the Policy.
In order to instil more confidence amongst Whistle Blowers, the management of the above referred reporting protocols are managed by an independent agency. Adequate safeguards have been provided in the Whistle Blower Policy to prevent victimization of anyone who is using this platform and direct access to the Chairman of the Audit Committee is also available in exceptional cases.
This Whistle Blower Policy is applicable to all the directors, employees, vendors and customers of the Company and it is also posted on the website of the Company.
The main objectives of the policy are as under :
a) To protect the brand, reputation and assets of the Company from loss or damage, resulting from suspected or confirmed incidents of fraud / misconduct.
b) To provide guidance to the employees, vendors and customers on reporting any suspicious activity and handling critical information and evidence.
c) To provide healthy and fraud-free work culture.
d) Recommend to the management for taking appropriate actions such as disciplinary action, termination of service, changes in policies & procedure and review of internal control systems;
e) Annual review of the policy.
) Disclosure under Section 22 & 28 of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.
d) Compliance with Regulations :
The Company has complied with all the requirements of regulatory authorities on capital markets. There have been no instance of non-compliance by the Company on any matters related to the capital markets, nor have any penalty / strictures been imposed on the Company by the Stock Exchanges or SEBI or any other statutory authorities on such matters, for the last 3 (three) years.
e) Other Disclosures :
i. Transactions with related parties, as per requirements of Accounting Standard 18, are disclosed in notes to accounts annexed to the financial statements.
ii. There are no materially significant transactions with the related parties viz. Promoters, Directors or the KMP, or their relatives or Subsidiaries that had potential conflict with the Company's interest. Suitable disclosure as required by the Accounting Standard (AS 18) has been made in the Annual Report.
iii. The Company has followed all relevant Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 while preparing Financial Statements.
iv. There are no pecuniary relationships or transactions of Independent / Non-Executive Directors vis-a-vis the Company which has potential conflict with the interests of the Company at large.
v. No penalties or strictures have been imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets during the last 3 (three) years.
vi. The Company has in place a mechanism to inform the Board members about the Risk assessment and mitigation plans and periodical reviews to ensure that the critical risks are controlled by the executive management. The details of the Risk Management Committee is provided at point no. 8 of this report.
vii. During the year ended 31st March 2015, the Company does not have any material listed / unlisted subsidiary companies as defined in Clause 49 of the Listing Agreement.
viii. The Independent Directors have confirmed that they meet the criteria of 'Independence' as stipulated under Clause 49 of the Listing Agreement.
12) MEANS OF COMMUNICATION
a) The quarterly / annual financial results are being furnished to Stock Exchanges and published in Financial Express / Indian Express in English and Loksatta in Marathi. The quarterly / annual financial results are also displayed on the Company's notice Board as well as uploaded on the Company's website www.sunflagsteel.com
b) Management Discussion and Analysis forms part of this Annual Report.
13) GENERAL SHAREHOLDER INFORMATION
Twenty-nineth (29th) Annual General Meeting : Friday, the 25th Day of September, 2015 at 3.00 P.M.
Book Closure Dates :
From Saturday, the 19th day of September, 2015 to Friday, the 25th September, 2015 (both days inclusive)
Tentative Schedule –
i) Unaudited Results for the Quarter ending on 30.06.2015 July / August 2015
ii) Unaudited Results for the Quarter / half year ending on 30.09 October / November 2015
iii)Unaudited Results for the Quarter ending on 31.12.2015 January / February 2016
iv) Audited Results for the Quarter / year ending on 31.03.2016 May 2016
d) Listing of Equity Shares
For the year 2014 - 2015, Company's Equity Shares were - BSE Limited (BSE)
listed with 2 (two) Stock Exchanges viz. BSE & NSE - The National Stock Exchange of India Limited (NSE)
e) Equity Shares - Stock Codes :
Trading Symbol at Stock Exchanges - 500404 (BSE)
- SUNFLAG (NSE)
Demat ISI Number in NSDL & CDSIL - INE947A01014 - Sunflag Iron – Equity
g) Registrar & Share Transfer Agent and process of transfer of shares :
Effective 31st March 2003, M/s Bigshare Services Private Limited, E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai - 400072 have been acting as the Registrar & Share Transfer Agent. All the Shareholders / Investors related Services, subject to approval of the Company either through Board / Committee of the Board or Managing Director / Company Secretary, are done by the said Registrar and Share Transfer Agent for and on behalf of the Company.
Dematerialisation of Shares and Trading at Stock Exchanges (Liquidity) :
Shares of the Company are compulsorily traded in electronic form only. Out of the shares held by Indian Public and Institutional Investors, etc., more than 59.491% of the shares have already been stand dematerialised, (Foreign Promoter's shareholding is presently held in physical form).
The Equity Shares of the Company were actively traded BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE) and hence have good liquidity.
j) Plant Location : Sunflag Iron and Steel Company Limited Works: P.O.: Bhandara Road, Warthi, BHANDARA - 441905 (Maharashtra) Phone Nos : 07184 - 285551 to 285555
ADDRESS FOR CORRESPONDENCE OF SHAREHOLDERS / INVESTORS
For all matters relating to Shares & Dematerialisation of shares be sent to :
M/s. Bigshare Services Private Limited E-2/3, Ansa Industrial Estate, Saki Vihar Road Saki Naka, Andheri (East), MUMBAI - 400072 Phone : 022 - 4043 0200 / 2847 0652 Fax : 022 - 28475207 E-mail : email@example.com Website : <http://www.bigshareonline.com>
Sunflag Iron and Steel Company Limited 33, Mount Road, Sadar, Nagpur - 440001 Phone : 0712-2524 661 / 2520 356 Fax : 0712-2520 360 E-Mail : firstname.lastname@example.org Website :
14) CEO / CFO Certificate on Corporate Governance
The Company has also obtained a certificate from the CEO / CFO of the Company regarding compliance stipulation of corporate governance as stipulated in Clause 49 of Listing Agreement with Stock Exchanges.
15) Auditors' certificate on Corporate Governance
The Company has obtained a certificate from the auditors of the Company regarding compliance stipulation of corporate governance as stipulated in Clause 49 of Listing Agreement with Stock Exchanges and the same is reproduced hereunder.