26 Apr 2017 | Livemint.com

Last Updated: Jan 23, 03:41 PM
Tulsyan NEC Ltd.


  • 15.50 0.00 (0%)
  • Vol: 100
  • BSE Code: 513629


  • 24.00 0.00 (0%)
  • Vol: 0

Tulsyan NEC Ltd. Accounting Policy


Tulsyan NEC Limited is committed to sound Corporate Governance practices. Tulsyan NEC Limited's ("the Company") corporate governance philosophy is built around the values of transparency, professionalism and accountability. Accordingly, the Company has put in place appropriate systems and procedures for reporting, monitoring and control, which ensure a balance of accountability between the Directors and the Management.

Your Company's annual reports, results presentations and other forms of corporate and financial communications, provide extensive details.


Your Company's Philosophy on the Code of Governance is to enhance the long term economic value of the Company, its Shareholders and all its Stakeholders by adopting better Corporate Practices with highest levels of transparency, accountability and equity in all facets of its operation.


The Company's Governance structure broadly comprises the Board of Directors and the Committees of the Board at the apex level and the Management structure at the operational level. This layered structure brings about a harmonious blend in governance as the Board sets the overall corporate objectives and gives direction and freedom to the Management to achieve these corporate objectives within a given framework, thereby bringing about an enabling environment for value creation through sustainable profitable growth.


The composition of the Board is in conformity with Clause 49 of the Listing Agreement. The Board of Directors consists of Eight Directors. Your company has an optimum combination of Executive and Non-Executive Directors at an equal half proportion. All the members of Board are eminent persons with expertise and extensive experience in different field and have made outstanding contribution to the Industry.


At the time of appointing a Director, a formal letter of appointment is given to him, which inter alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the compliances required from him under the Companies Act, Clause 49 of the Listing Agreement and other relevant regulations and his affirmation taken with respect to the same.

Further, with a view to familiarize him with the Company's Operations, the Director is explained on the manufacturing activities and processes of the steel industry, organisational set up of the Company, the functioning of various divisions / departments, the Company's market share and the markets in which it operates, governance and internal control processes and other relevant information pertaining to the Company's business. The Chairman and the MD also has a one-to-one discussion with the newly appointed Director. The above initiatives help the Director to understand the Company, its business and the regulatory framework in which the Company operates and equips him to effectively fulfill his role as a Director of the Company.

Board Meetings and Attendance and Number of other Directorships / Committee Chairmanships & Committee Memberships of each Director in various Companies:

Eight Board Meetings were held during the fi nancial year 1st April, 2014 to 31st March, 2015 on; 30th June, 2014, 14th August 2014, 14th November 2014, 31st December 2014, 13th February 2015, 14th February, 2015, 19th February, 2015 and 25th March, 2015.

None of the directors on the Board is a member of more than ten committees or chairman of more than five committees across all the companies in which they are Directors. The Chairmanship / membership of committees include only Audit Committee and Stakeholders' Relationship committee as required by Clause 49 of the Listing Agreement, in accordance with the disclosures made by the Directors.


A detailed agenda is sent to each Director in advance of Board and Committee Meetings. To enable the Board to discharge its responsibilities effectively, the Managing Director apprises the Board at every meeting of the overall performance of the Company.

The Board reviews strategy and business plans, minutes of the Board Meetings of Company's unlisted subsidiary companies, significant transactions and arrangements entered into by the unlisted subsidiary companies, adoption of financial results, major accounting provisions and write-offs, Minutes of Meetings of the Audit and other Committees of the Board, and information on recruitment of officers just below the Board level, including the Company Secretary and the Compliance Officer.


In terms of Clause 49(IV)(G) of the Listing Agreement with the Stock Exchanges, a brief resume of directors, proposed to be appointed / re-appointed, nature of their expertise in specific functional areas, their other directorships and committee memberships, their shareholdings and their relationships, if any, with other directors are provided in the notice convening the AGM.


As on 31st March, 2015, the Committee comprised of 3 Directors: Shri C. Ramachandran, Shri A.P. Venkateswaran and Smt. Kalyani Venkatesan.

Shri C.Ramachandran, Chairman of the Committee and Shri C.Ramachandran and Smt. Kalyani Venkatesan are independent Directors. All members of the Committee have good knowledge of accounting and financial management. The Company Secretary is the Secretary to the Committee.

The Audit Committee acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting processes, reviewing the Company's established systems and processes for internal financial controls, governance and reviewing the Company's statutory and internal audit activities. The Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement. Some of the important functions performed by the Committee are:

Financial Reporting and Related Processes

• Oversight of the Company's financial reporting process and financial information submitted to the Stock Exchanges, regulatory authorities or the public.

• Reviewing with the Management the quarterly unaudited financial statements and the Auditors' Limited Review Report thereon/audited annual financial statements and Auditors' Report thereon before submission to the Board for approval. This would, inter alia, include reviewing changes in the accounting policies and reasons for the same, major accounting estimates based on exercise of judgement by the Management, significant adjustments made in the financial statements and / or recommendation, if any, made by the Statutory Auditors in this regard.

• Review the Management Discussion & Analysis of financial and operational performance.

• Discuss with the Statutory Auditors its judgement about the quality and appropriateness of the Company's accounting principles with reference to the Generally Accepted Accounting Principles in India (IGAAP).

• Review the investments made by the Company. Internal Controls and Governance Processes

• Review the adequacy and effectiveness of the Company's system and internal controls.

• Review and discuss with the Management the Company's major financial risk exposures and steps taken by the Management to monitor and control such exposure.

• To oversee and review the functioning of a vigil mechanism (implemented in the Company as a Whistle Blower Policy) and to review the findings of investigation into cases of material nature and the actions taken in respect thereof.


• Review the scope of the Statutory Auditors, the annual audit plan and the Internal Audit Plan with a view to ensure adequate coverage.

• Review the significant audit findings from the statutory and internal audits carried out, the recommendations and Management's response thereto.

• Review and recommend to the Board the appointment/re-appointment of the Statutory Auditors and Cost Auditors considering their independence and effectiveness and their replacement and removal.

• Approve such additional services to be rendered by the Statutory Auditors except those enumerated in Section 144 of the Companies Act, 2013 and payment for such services.

• To recommend to the Board the remuneration of the Statutory Auditors/Cost Auditors.

• To discuss with the Statutory Auditors/Internal Auditors any significant difficulties encountered during the course of the Audit.

• Review annual Cost Audit Report submitted by the Cost Auditor.

Other Duties

• To approve the appointment, removal and terms of remuneration of the Internal Auditor and to approve the appointment of the Chief Financial Officer.

• To grant omnibus approval for related party transactions which are in the ordinary course of business and on an arms length pricing basis and to review and approve such transactions subject to the approval of the Board.

The Committee met five times during the year under review and the gap between two Meetings did not exceed four months. During the financial year 1st April 2014 to 31st March 2015, the Committee met on: 30th June 2014, 14th August 2014, 14th November 2014, 13th February, 2015 and 14th February 2015. The attendance at the Meetings is as under:

The present composition of the Audit Committee consists of Shri C. Ramachandran, Shri Sanjay Agarwalla and Smt. Kalyani Venkatesan as members. Shri A. P. Venkateswaran resigned from the Audit Committee of the Board  on 29th May, 2015.


The role of the Nomination and Remuneration Committee is to review market practices and to decide on remuneration packages applicable to the Managing Director(s) and Whole-time Director(s), key managerial personnel and other employees of the Company.

The terms of reference of the Committee inter alia, include the following:

• Succession planning of the Board of Directors and Senior Management Employees;

• Identifying and selection of candidates for appointment as Directors / Independent Directors based on certain laid down criteria;

• Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions;

• Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and senior management employees and their remuneration;

• Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board. In reviewing the overall remuneration of the Board of Directors and Senior Management, the Committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talent, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and that the remuneration involves a balance between fixed and incentive pay reflecting short term and long term objectives of the Company.

The said Committee of the Board comprises of three Non-Executive Independent Directors namely Shri C. Ramachandran, Shri P.T. Rangamani and Smt. Kalyani Venkatesan. The special resolutions for payment of remuneration to the Executive / whole-time directors have been approved by the shareholders by way of Postal Ballot as required by section 110 of the Companies Act, 2013. Their remuneration structure comprises salary, perquisites and allowances and contribution to provident fund.

The Non-executive Directors do not draw any remuneration from the Company other than sitting fees. Details of the salary paid to the directors are shown below.


In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement, the Board has renamed the existing "Share allotment/transfer- cum- Investor Grievances Committee" as the "Stakeholders' Relationship Committee".

The terms of reference of the Committee are:

• transfer / transmission of shares/debentures and such other securities as may be issued by the Company from time to time;

• issue of duplicate share certificates for shares/debentures and other securities reported lost, defaced or destroyed, as per the laid down procedure;

• issue new certificates against subdivision of shares, renewal, split or consolidation of share certificates / certificates relating to other securities;

• issue and allot right shares / bonus shares pursuant to a Rights Issue / Bonus Issue made by the Company, subject to such approvals as may be required;

• to grant Employee Stock Options pursuant to approved Employees' Stock Option Scheme(s), if any, and to allot shares pursuant to options exercised;

• to issue and allot debentures, bonds and other securities, subject to such approvals as may be required;

• to approve and monitor dematerialization of shares / debentures / other securities and all matters incidental or related thereto;

• to authorize the Company Secretary and Head Compliance / other Officers of the Share Department to attend to matters relating to non-receipt of annual reports, notices, non receipt of declared dividend / interest, change of address for correspondence etc. and to monitor action taken;

• monitoring expeditious redressal of investors / stakeholders grievances; v all other matters incidental or related to shares, debentures and other securities of the Company.

The Company's Stakeholders' Relationship Committee functions under the Chairmanship of Shri.P.T. Rangamani, Non-Executive Independent Director. Shri C. Ramachandran and Smt. Kalyani Venkatesan are the other members of the Committee. Shri. CS Giridhar, Company Secretary, is the Compliance Officer of the Company. The Committee meets as and when required, to inter-alia deal with matters relating to its terms of reference which include transfer of shares and monitoring redressal of complaints from shareholders relating to transfers, non-receipt of balance sheet, non-receipt of dividends declared, etc. The Committee met four times during the year 1st April 2013 to 31st March 2014 on: 30th June, 2014, 14th August 2014, 14th November 2014 and 13th February 2015.

During the year, 2 complaints were received from the Shareholders, all of which have been attended to and resolved. As on 31st March, 2015, there are no pending share transfers or complaints from the shareholders.

Corporate Social Responsibility Committee - (constituted in 2014)

The terms of reference of the Corporate Social Responsibility Committee (CSR Committee) broadly comprises:

* To review the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;

* To provide guidance on various CSR activities to be undertaken by the Company and to monitor its progress.


During the year under review, the Independent Directors met on 14th February, 2015, inter alia, to discuss:

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

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

• assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The independent directors at their meeting held on 14th February, 2015 discussed ont these points and expressed satisfaction over the same.


The Nomination and Remuneration (N&R) Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors and CEO & Managing Director and their remuneration. This Policy is accordingly derived from the said Charter.


• The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

• In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the independent nature of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.

• The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.

• The N&R Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director.

• Qualification, expertise and experience of the Directors in their respective fields;

• Personal, Professional or business standing;

• Diversity of the Board.

• In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.


An independent director shall not be entitled to any stock option and may receive sitting for attending meetings of the Board or Committee thereof (subject to certain limits prescribed under the Companies Act, 2013 and the relevant Rules made thereunder), reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members.

While deciding on the remuneration for Directors, the Board and the Nomination and Remuneration Committee consider the performance of the Company, the current trends in the industry, the qualifications of the appointee(s), their experience, past performance and other relevant factors. The Board and the Nomination and Remuneration Committee regularly tracks the market trends in terms of compensation levels and practices in relevant industries through participation in structured surveys. This information is used to review the Company's remuneration policies.


For the purpose of selection of the CEO & MD, the Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board. The Committee will also ensure that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws.


At the time of appointment or re-appointment, the CEO & Managing Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the N&R Committee and the Board of Directors) and the CEO & Managing Director within the overall limits prescribed under the Companies Act, 2013. The remuneration shall be subject to the approval of the Members of the Company in General Meeting.

Remuneration Policy for the Senior Management Employees

In determining the remuneration of the Senior Management Employees (i.e. KMPs and Head of Departments), the N&R Committee shall ensure / consider the following, as may be applicable;

• the relationship of remuneration and performance benchmark is clear;

• the balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to the working of the Company and its goals;

• the remuneration is divided into two components viz. fixed component comprising salaries, perquisites and retirement benefits and a variable component comprising performance bonus;

• the remuneration including annual increment and performance bonus is decided based on the criticality of the roles and responsibilities, the Company's performance, individuals performance, industry benchmark and current compensation trends in the market.

The Managing Director will carry out the individual performance review based on the standard appraisal matrix and shall take into account the appraisal score card and other factors mentioned herein-above, whilst recommending the annual increment and performance incentive to the N&R Committee for its review and approval.


Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Compliance Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.


The Remuneration paid to Non-Executive-Independent Directors is by way of sitting fees and reimbursement of expenses incurred in attending the Board and Committee Meetings.

The remuneration paid to Chairman (Executive), Managing Director and the Whole-time Director are fixed by the Nomination and Remuneration Committee which is subsequently approved by the Board of Directors and Shareholders at a General Meeting.

The Company has not advanced loans to any Director during the year.

As on date, the Company has not issued any stock options to the Directors / Employees of the Company. The tenure of office of the Executive Directors and whole-time Directors are as per the provisions of the Companies Act and as approved by the shareholders in the AGM held on 14th September, 2011.

Managerial Remuneration paid during the year 2014-15 was Rs.1,91,20,524. The Company has obtained requisite approvals from the shareholders of the Company as required by the provisions of the Companies Act, 2013.


The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding accounting year or has generated 20% of the consolidated income of the Company during the previous financial year. Accordingly, a policy on material subsidiaries has not been formulated. The Audited Annual Financial Statements of Subsidiary Companies are tabled at the Audit Committee and Board Meetings. The copies of the Minutes of the Committee Meetings and the Board Meetings of the Subsidiary Companies are periodically tabled at the meeting(s) of the Board.




The Company has in place the Code of Conduct and Ethics for member of the board and senior management personnel (the Code) approved by the board. The Code has also been displayed on the Company's website www.tulsyannec.in . All the members of the Board and senior management personnel have confirmed compliance with the Code for the year ended 31st March 2015. The Annual Report contains a declaration to this effect signed by the Whole-time Director.


As required under Clause 49V of the Listing Agreement with the Stock Exchanges, the Managing Director (CEO) and the Chief Financial Officer of the Company have certified to the Board regarding the financial statements, and matters related to internal controls in the prescribed format for the year ended 31st March, 2015.


During the financial year 2014-15, there were no materially significant transactions entered into between the Company and its Promoters, Directors or the management, holding company, subsidiaries or relatives that may have potential conflict with the interests of the Company at large. Further, details of related party transactions form part of notes to the accounts of the Annual Report.

Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company's website.


In the preparation of the financial statements, the Company has followed the Accounting Standards notified pursuant to Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provision of the Companies Act, 1956 read with General Circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.


The Company has received the letter from BSE Limited imposing fine for delayed submission of quarterly financial results to the stock exchange for the quarter ended 31st March, 2014 and for the quarter ended 30th September, 2014. The Company has paid the fine as required by the exchange in accordance with SEBI circular CIR/MRD/DSA/31/2013 dated September 30, 2013.


The Company has a formal system of internal control testing which examines both the design effectiveness and operational effectiveness to ensure reliability of financial and operational information and all statutory / regulatory compliances. The Company's business processes are on Microsoft Navision ERP platform and have strong monitoring and reporting process resulting in financial discipline and accountability.


The Company has instituted a comprehensive Code of Conduct for Prevention of Insider Trading for its Designated Employees, in compliance with Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Code lays down Guidelines, through which it advises the designated employees on procedures to be followed and disclosures to be made, while dealing with shares of the Company, and cautions them of the consequences of violations.


The Company has established Whistle blower policy - vigil mechanism for directors and employees to report genuine concerns to the management about instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. This mechanism also provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Chairman of Audit Committee in exceptional cases. The policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

During the year ended 31st March, 2015, there were no instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy.


Management Discussion and Analysis Report (MDA) has been attached as a separate chapter and forms part of this Annual Report.


The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement relating to Corporate Governance. As regards the non-mandatory requirements, the Company has set up the Nomination and Remuneration Committee of the Board, the details of which have been provided under the section "Committees of the Board". During the year under review, there was no audit qualification in the Company's financial statements. The Company continues to adopt best practices to ensure that its financial statements remained unqualified.


The quarterly, half-yearly and yearly results as required under Clause 41 of the Listing Agreement are normally published in 'Trinity Mirror' all Editions in English and in Tamil 'Makkal Kural'. These are not sent individually to the Shareholders. The Company's results are displayed on the Company's website at www.tulsyannec.in . The Company has not made any presentations to any institutional investors/analyst during the year.


Annual General Meeting

Date and Time 30th September, 2015 at 11.30 am


Naradha Gana Sabha (Mini Hall), 254, T.T.K. Road, Chennai - 600 018

Results for the quarter ended (Tentative)

30th June, 2015 - Before 14.08.2015

Financial Calendar

30th June, 2015 – Before 14.08.2015

30th September, 2015 – Before 14.11.2015

31st December, 2015 – Before 14.02.2016

31st March, 2016 – Before 30.05.2016

Dates of Book Closure :

24th September, 2015 to 30th September, 2015 (7 days)

Dividend Payment Date :

No Dividend Declared

Listing on Stock Exchanges

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited and Calcutta Stock Exchange Limited. The Company has paid the listing fees to the Stock Exchanges.

BSE 513629

MSE Tulsyan NEC

Demat ISIN Number in NSDL and CDSL for Equity Shares : INE463D01016

Registrar and Share Transfer Agent : Cameo Corporate Services Limited,

Subramanian Building, #1 Club House Road, Chennai - 600 002

Phone : 044 2846 0390 Fax : 044 2846 0129

Email : investor@cameoindia.com


As on 31st March 2015, 85.71 percent of the equity shares are held in dematerialised form with National Securities Depository Limited and Central Depository Services (India) Limited. The market lot is one share, as trading in the Equity Shares of the Company on exchanges is permitted only in dematerialised form.

Non-Promoters' holding : 29.24 percent.


The Company has not issued any ADRs/GDRs/Warrants or any convertible instruments.


61 Sembudoss Street Chennai - 600 001, Tamil Nadu Tel: 044 - 2522 2673


Apex Plaza, 1st Floor No.3 Nungambakkam High Road Chennai - 600 034, Tamil Nadu Tel: 044 - 3918 1060 Fax: 044 - 3918 1097


a. Steel Division :

D-4 SIPCOT Industrial Complex, Gummudipoondi-601 201, Tamil Nadu


50B, Muktaram Babu Street, Kolkata 700 007


135 / 51A, Girish Ghosh Road, Belur, Howrah 711 202

Power Plant:

No. 17, Sithurnatham Village, Gummidipoondi-601 201, Tamil Nadu


1. Kudimangalam, Udumalpet, Tamil Nadu

2. Pazhavoor, Tirunelveli District, Tamil Nadu

3. Kavalakurichi, Tirunelveli District, Tamil Nadu

b. Synthetic Division

7-A, Doddaballapura Industrial Area,

Kasba Hobli, Karnataka

Plot No.E-4, Madkaim Industrial Area, Madkaim Village, Ponda Taluk, Goa

Survey No. 237 to 245, Boincheruvupalli Village, Peapully Mandal, Kurnool District, Andhra Pradesh - 581 220


Shri CS Giridhar

First Floor, Apex Plaza, 3, Nungambakkam High Road, Nungambakkam, Chennai - 600034

Phone: 044 3918 1060, Fax: 044 3918 1097

Email: investor@tulsyannec.in  Website: www.tulsyannec.in  


The Company has also designated investor@tulsyannec.in  as an exclusive email ID for Shareholders for the purpose of registering complaints. This has also been displayed on the Company's website.

Company's website