REPORT ON CORPORATE GOVERNANCE
Vedanta Limited, is and has always been, committed, in true spirit, for adoption of best governance practices. Companies today are evaluated by the Shareholders and other Stakeholders not based on financial performance alone, but on the other non-financial parameters, viz., level of governance and sustainability practices, viz., health, safety, environment practices, quality of products & services and its impact on environment, Corporate Social Responsibility (CSR), transparency, disclosures etc. Corporate Governance (Governance) is aimed at creating systems and putting in processes whereby organisations are able to generate long-term wealth and create value for all its stakeholders.
Transparency, accountability, fairness and responsibility are the four basic tenets of Corporate Governance and Vedanta Limited (‘Company’ or ‘Vedanta’) believes that fair, transparent and ethical governance practices are sine qua non for the way we do business.
Company’s Philosophy on Code of Governance
Our actions are governed by our values and principles, which are reinforced at all levels within the Company. At Vedanta we are committed to meet the aspirations of all our stakeholders which include shareholders, customers, suppliers, banks & financial institutions, government, employees and the community at large. We ensure:
Transparency, fairness and timely disclosures; Fair and Equitable treatment to all shareholders and protection of shareholder’s interests and rights; Compliances with all applicable laws & regulations; Ethical business decisions to meet stakeholder expectations; and Accountability of the Board to the Company and its Stakeholders.
Our governance practices are self-driven and focused to meet the aspirations of the stakeholders and at the same time create an institution which all stakeholders are proud to be associated with.
Board of Directors
The Board of Directors (the “Board”) of the Company are committed to best governance practices in the Company to ensure sustainability and long term value. The Board plays a major role in overseeing how the management serves the short term and long term interests of shareholders and other stakeholders. The Board along with its Committees provide leadership and guidance to the Company’s management and directs, supervises and controls the performance of the Company.
Composition, Directorship and Meetings
The Board of Directors presently consists of Eight (8) Directors comprising of Four (4) Whole-Time Directors and Four (4) Non-Executive Independent Directors. The Chairman is an Executive Director. The position of Chairman of the Board and Chief Executive Officer of the Company are held by separate individuals.
Detailed profile of each of the Directors is available on the website of the Company at www.vedantalimited.com in the investor relation section.
During FY 2015-16, Board of Directors met seven (7) times on April 29, 2015, May 28, 2015, June 14, 2015, July 29, 2015, October 27, 2015, November 27, 2015 and January 28, 2016. The gap between any two consecutive meetings of the Board of Directors of the Company was not more than One Hundred and Twenty Days (120 days). The Board of Directors approved Nine (9) matters by passing resolution(s) by circulation during FY 2015-16.
Composition of the Board of Directors of the Company and other Directorship(s)/ Committee Membership(s)/ Chairmanship(s) as on March 31, 2016, and number of meetings held during their tenure and attended by them etc. are given in Table – 1.
1. None of the above directors are related inter-se.
2. None of the Directors hold the office of director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 25 and 26 of the Securities and Exchange Board of India, (Listing Obligations & Disclosure Requirements) Regulations, 2015
3. Video / tele-conferencing facilities were facilitated to Directors travelling in India or abroad for participation in the meeting on requirement basis.
Information given to the Board
The dates for the Board Meetings for the ensuing year are decided well in advance and communicated to the Directors. Additional meetings of the Board are held when deemed necessary. Board members are given agenda papers along with necessary documents and information in advance of each meeting of the Board and Committee(s). However, in case of business exigencies or urgencies, few resolutions are passed by way of circulation and if required same is supported by an audio call to explain the rationale. The Board periodically reviews compliance reports with respect to laws and regulations applicable to the Company. The recommendations of the Committees are placed before the Board for necessary approvals. The information as enumerated in Part A of Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’) http://www.sebi.gov.in/cms/sebi_data/ attachdocs/1441284401427.pdf is made available to the Board of Directors for discussions and considerations.
The Company has in place a web-based application vide which Agenda papers and pre-reads are uploaded online and which can be accessed by the Directors immediately through their iPads. This initiative has facilitated immediate availability of agenda papers to the Directors and at the same time, it is environment friendly (in terms of conservation of paper) and also maintains confidentiality of the information shared with the Board.
Selection / Appointment procedure
As per the Company’s Nomination and Remuneration Policy, selection of new Board Member(s) is the responsibility of the Nomination and Remuneration Committee (‘NRC’), which is subsequently considered and approved by the Board. The NRC considers the knowledge, skill, professional & functional expertise, industry orientation, diverse academic, professional or technical background, gender, age etc. while selecting an individual as a director. The appointment of a new Director is finally approved by the shareholders either through postal ballot or in a General Meeting.
Based on the confirmation/ disclosures received from the Directors, all Non-Executive Directors are Independent in terms of Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI Listing Regulations.
There are no material pecuniary relationships or transactions between the Independent Directors and the Company, except for sitting fees and commission drawn by them for attending the meeting of the Board and Committee(s) thereof. None of the Non-Executive Directors hold any shares or convertible instruments in the Company. A separate meeting of the Independent Directors was held on April 27, 2016 to discuss inter alia:
The performance of the Chairperson of the Company, taking into account the views of Executive and Non- Executive Directors;
The performance of the Non-Independent Directors and the Board as a whole;
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.
Board Familiarization and Induction Program
The Company has adopted a well-structured induction policy for orientation and training of the Non-Executive Directors to provide them with an opportunity to familiarise themselves with the Company, its management, its operations and the industry in which the Company operates. The induction programme includes one-to-one interactive sessions with the Executive Directors, Senior Management including the Business CEOs and also includes visit to Company and its subsidiaries plant sites and locations.
Further, in every quarterly Board meeting, a detailed review on the various business divisions and major subsidiaries is presented on rotation basis in order to update the Directors and to ensure their effective participation in the Company’s strategy, business performance, operations, finance, investor relations, risk management framework, human resources, IT and other related matters. The presentations to the Board includes update on risk management, company’s policies, and quarterly performance report which includes information on business performance, operations, financial parameters, litigations, compliances.
During the year, the Independent Directors visited the facilities at Barmer of Cairn India Limited (CIL) and mines and plant at Rampura Agucha and Chanderiya Smelter of Hindustan Zinc Limited (HZL), subsidiaries of the Company. Site visits were also organised at the Value Added Business of Iron-Ore division. Further, the Independent Directors are also regularly informed on the Company operations by way of monthly CEO Report. The Directors are presented in advance with the Board Calendar for the entire year which includes coverage of businesses and corporate functions to keep them fully updated on key developments of the Company. Any other important development related to the company, is periodically communicated to the Non-Executive/ Independent Directors. Detailed familiarisation programme for Directors is available on the Company’s website at http://www.vedantalimited. com/media/95643/familiarization_programme.pdf
Code of Business Conduct and Ethics
The Company has laid down a Code of Conduct (COC) which is applicable to all the Board members and Senior Management of the Company. The COC is available on the website of the Company www.vedantalimited.com. The Code has been circulated to all members of the Board and Senior Management and they have affirmed compliance with the Code. A declaration signed by the Chief Executive Officer (CEO) to this effect is attached as Annexure I to this Report. As an issuer of securities in the United States, the Company is subject to the US Foreign Corrupt Practices Act (FCPA). Further, on account of our parent company, Vedanta Resources Plc., incorporated in United Kingdom and listed on London Stock Exchange, the Company is subject to UK Bribery Act (UKBA). Other countries where we do business have their own anti-corruption laws. Accordingly, the Company, its subsidiaries and affiliates and all officials that act on behalf of the Company, its subsidiaries and affiliates comply fully with the FCPA and UKBA and all applicable anticorruption laws, in doing business anywhere in the world.
The certificate required under Regulation 17(8) of the SEBI Listing Regulations duly signed by the Chief Executive Officer and Chief Financial Officer was placed before the Board and the same is provided as Annexure II to this report.
Risk Mitigation Plan
The Company has laid down procedures to inform the Board members about the risk assessment and minimization procedures. These procedures are being periodically reviewed by the Risk Management Committee to ensure that management controls risk through means of properly defined framework. A separate section on Principal Risk & Uncertainties is covered in the Management Discussions & Analysis.
The Board has constituted Committee(s) of directors, with adequate delegation of powers. The Company Secretary of the Company acts as the Secretary to the Committees. The Board is responsible for constituting, assigning and co-opting the members of the Committees. Each Committee has its own charter which sets forth the purposes, goals and responsibilities of the Committees. These Committees comprise mainly of Independent Directors who as per the terms of reference oversee the Committee’s function and executes its duties and responsibilities. As at the year end, there are six (6) Committees constituted by the Board as per following details:
1. Audit Committee
As on March 31, 2016, the Audit Committee of the Board comprises of three (3) Non-Executive Directors all of whom are Independent. The Chairperson of the Audit Committee is a Non-Executive Independent Director. The composition of the Committee is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations.
The CEO, CFO, Director-Finance, Director- Management Assurance Services (MAS), Deputy Chief Financial Officer and the Statutory Auditors regularly attend the meeting of the Audit Committee as permanent invitees. Other invitees are invited on need basis to brief the Audit Committee on important matters. The role and terms of reference of the Audit Committee are set out in Regulation 18(3) read with Part C of Schedule II of the SEBI Listing Regulations and Section 177 of the Companies Act, 2013, besides other terms as may be referred to by the Board of Directors of the Company. The terms of reference of the Audit Committee broadly are:
1. Approval of annual internal audit plan;
2. Review and approval of related party transactions;
3. Review of financial reporting systems;
4. Ensuring compliance with regulatory guidelines;
5. Reviewing the quarterly, half yearly and annual financial results;
6. Discussing the annual financial statements and auditors report before submission to the Board with particular reference to the (i) Director’s Responsibility Statement; (ii) major accounting entries; (iii) significant adjustments in financial statements arising out of audit findings; (iv) compliance with listing requirements etc.;
7. Interaction with statutory, internal and cost auditors;
8. Recommendation for appointment and remuneration of auditors; and
9. Reviewing and monitoring the auditor’s independence and performance etc.
Further the Audit Committee also mandatorily reviews the following information:
1. Management discussion and analysis of financial condition and results of operations;
2. Statement of significant related party transactions submitted by management;
3. Management letters / letters of internal control weaknesses issued by the statutory auditors;
4. Internal audit reports relating to internal control weaknesses;
5. The appointment, removal and terms of remuneration of the internal auditor shall be subject to review by the audit committee; and
6. Statement of deviations:
(a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1) of SEBI Listing Regulations;
(b) Annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/ notice in terms of Regulation 32(7) of SEBI Listing Regulations.
In addition to the above, the Audit Committee also reviews the financial statements, minutes and details of investments made by the subsidiary companies. Meeting, Attendance and Composition During FY 2015-16, the Audit Committee met Eight (8) times i.e. on April 28, 2015; May 28, 2015; June 14, 2015; July 28, 2015; October 26, 2015; November 27, 2015; December 16, 2015 and January 27, 2016. The time gap between two meetings was less than One Hundred and Twenty days (120 days). The Audit Committee members approved Seven (7) matters by passing resolution(s) by circulation during FY 2015-16.
2. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board was reconstituted during the year. The composition of the Committee is in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI Listing Regulations. The role of Committee inter-alia includes:
1. Formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board of Directors a policy relating to, the remuneration of the Directors, Key Managerial Personnel and other employees;
2. Formulation of criteria for evaluation of performance of Independent Directors and the Board of Directors;
3. Devising a policy on diversity of Board of Directors;
4. Identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal;
5. To consider and evaluate whether to extend or continue the term of appointment of the Independent Directors, on the basis of the report of performance evaluation of Independent Directors.
Composition, names of members and attendance during the year As of March 31, 2016, the Nomination & Remuneration Committee comprises of four (4) members of which three (3) are Independent Directors and one (1) is Executive Director, who is the Executive Chairman of the Company. The chairman of the Committee is a Non-Executive Independent Director. During FY 2015-16, the Nomination and Remuneration Committee met two (2) times i.e. on April 29, 2015 and July 29, 2015.
The composition and attendance of members at the meetings held during FY 2015-16, are given in Table – 3.
Performance Evaluation Criteria
The Company believes in conducting its business affairs in a fair and transparent manner; giving highest regard to good Corporate Governance practices and ensuring transparency, accountability and equity across all facets of operation and in all interactions with Stakeholders.
The Nomination and Remuneration Committee had laid down the evaluation criteria for performance evaluation of every director including Independent director and the Board pursuant to the Corporate Governance norms prescribed by the Companies Act, 2013 and SEBI Listing Regulations.
Remuneration Policy for Directors
The remuneration paid by the Company to its Executive and Non-Executive Directors is decided by taking into consideration the following:
a. Company’s size and global presence;
b. Remuneration trend in the industry;
c. Compensation paid by peer companies;
d. As a reflection of responsibility and performance; and
e. Employment scenario.
Remuneration paid to Executive Director(s)
The Company has four (4) Executive Directors viz. Mr. Navin Agarwal, Mr. Thomas Albanese (CEO), Mr. Tarun Jain and Mr. DD Jalan (CFO). The remuneration of the Executive Directors is approved by the Board of Directors within the limits approved by the shareholders on the basis of the recommendation of the Nomination and Remuneration Committee.
The Executive Directors’ remuneration has two components: fixed pay and annual variable pay (performance linked incentive). The fixed component is paid to the directors on monthly basis; the performance linked incentive is paid on the basis of individual performance after the end of financial year based on the recommendation of the Nomination and Remuneration Committee. Additionally, the Executive Directors are given deferred stock options of Vedanta Resources Plc.
Remuneration paid to Non-Executive Independent Director During the financial year the Non-Executive Directors do not have any pecuniary relationship or transactions with the Company. The appointment letter issued to the Independent Director is available on the website of the Company www. vedantalimited.com.
The Independent directors are eligible for sitting fees and commission as under:
Commission as decided by the Board;
The commission is payable annually after review of the financial position/ performance of the Company and approval of the annual financial results for the year; The payment of commission is subject to availability of sufficient profits within an overall ceiling of 1% of net profits and is within the limits approved by the shareholders in general meeting;
Sitting fees of Rs. 50,000/- for attending meeting of the Board;
Sitting fees of Rs. 50,000/- for attending meetings of Audit Committee of Board;
Sitting fees of Rs. 10,000/- for attending other Committee meetings;
3. Stakeholders’ Relationship Committee
During the year the Stakeholders’ Relationship Committee has been re-constituted on April 29, 2015 to appoint Ms. Anuradha Dutt as a member of the Committee. As on March 31, 2016 the Committee comprise of three (3) members. Ms. Anuradha Dutt, Non-Executive Independent Director is the Chairperson of the Committee.
The main function of the Stakeholders’ Relationship Committee is to strengthen the investor relations. The Committee looks into redressal of shareholders’ complaints and proper and timely attendance on the investors grievances. The key responsibilities of the Committee are as under
(i) Redressal of Shareholders’/Investors’ complaints;
(ii) Non-receipt of declared dividends, balance sheets of the Company; and
(iii) Carrying out any other function as prescribed under in the SEBI Listing Regulations.
Meeting, Attendance and Composition
The Committee met three (3) times during FY 2015-16 viz. April 28, 2015; July 28, 2015 and January 27, 2016. The minutes of the Committee meeting are noted by the Board at its meeting. The attendance records of members of the Stakeholders Relationship Committee is given in Table - 5
Mr. Rajiv Choubey, Company Secretary & VP Legal, acts as Compliance Officer of the Company for complying with the requirements of the SEBI Listing Regulations, and requirements of SEBI (Prohibition of Insider Trading) Regulation, 1992.
During FY 2015-16, the investor complaints received by the Company were general in nature, which were resolved to the satisfaction of the shareholders.
The status of complaints is reported to the Board on quarterly basis. Details of investors’ complaints as on March 31, 2016 are given in Table – 6.
Share Transfer Committee
In addition to the Stakeholders’ Relationship Committee, the Board has constituted another committee referred as the Share & Debenture Transfer Committee comprising of members from the senior management to approve the transfer of equity shares of the Company. The members of the Share Transfer Committee are Mr. G.R. Arun Kumar, Deputy CFO; Mr. Rajiv Choubey, Company Secretary & VP Legal and Ms. Pooja Yadava, GM Legal. There were 20 meetings held during the year ended March 31, 2016. The number of pending share transfers as on March 31, 2016 is Nil.
Committee of Director for Issuance of Share Certificate
On April 28, 2016, the Board has constituted a Committee of Directors for Issuance of Share Certificates comprising of Mr. Tarun Jain, Whole-Time Director, Mr. Thomas Albanese, Whole-Time Director & CEO and Mr. DD Jalan, Whole- Time Director & CFO to periodically approve issuance of duplicate certificates and new certificates on account of split, consolidation, renewal, de-mat, re-mat of shares, debenture, and other securities issued by the Company from time to time.
4. Corporate Social Responsibility Committee
The Company’s Corporate Social Responsibility (CSR) Committee comprises of five (5) members including three (3) Independent Directors and two (2) Executive Directors. The broad terms of reference of the CSR Committee are as follows:
To formulate and recommend to the Board the CSR Policy and activities to be undertaken by the Company in this regard and to monitor the same from time to time; Recommending the amount of expenditure to be incurred on CSR activities of the Company; Reviewing the performance of the Company in the area of CSR;
Guidance on the impact of business activities on environment and society; and Monitoring the implementation of the CSR projects or activities undertaken by the Company.
Meeting, Attendance and Composition
During the Financial Year ended March 31, 2016, the Committee met two times (2) i.e. on April 28, 2015 and January 27, 2016. The composition and attendance of members at the meetings held during FY 2015-16 are given in Table - 7.
5. Risk Management Committee
The Board had constituted the Risk Management Committee to periodically review the risk matrix and ensure that the executive management controls risk through properly defined framework. The constitution of the Committee is in compliance with Regulation 21 of the SEBI Listing Regulation. The Committee comprises of four (4) members including three (3) Executive Directors and one (1) member from the Senior Management/ Executive Committee (EXCO). The meetings of the Risk Management Committee are chaired by the Director as specified in Regulation 21 of SEBI Listing Regulations.
Scope and Responsibility
To review the Risk Management Policy and associated frameworks, processes and practices of the Company and to recommend to the Audit Committee/ Board for approval/ changes;
To ensure that the Company takes appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities;
To evaluate significant risk exposures of the Company and assess management’s action to mitigate exposures in a timely manner;
To assess risk on ongoing basis and minimising the procedures; and
To make a comprehensive reporting system;
6. Committee of Directors
In addition to the above committees, the Board has also constituted a functional committee known as the ‘Committee of Directors’ to cater to various day-to-day requirements and to facilitate seamless operations of the Company. The Committee of Directors comprises of the four (4) Executive Directors and meets as and when required. During the year under review, the Committee met nine (9) times.
Executive Committee (EXCO)
Further, to ensure periodical review of the various business divisions and key subsidiaries of the Company, the Group has constituted an Executive Committee headed by the Executive Chairman of the Company. The members of the EXCO are Group CEO, Group CFO, Director-Finance, CEO-Diversified Metals, President- Global Zinc Business, CEO of the Business (Copper, Aluminium, Power, Iron-Ore) and CEO of Key Subsidiaries (CEO-HZL, CEO- Cairn, Group General Counsel, Head of HR, Corporate Communications & Sustainability.
The CFOs/Deputy CFOs of respective businesses and subsidiaries and other invitees are also invited to EXCO. The EXCO meets every month, chaired by Group CEO.
During the year, the shareholders passed the resolution for shifting of the Registered Office from the State of Goa to the State of Maharashtra by way of Postal Ballot. The Notice dated May 28, 2015 was sent to the members of the Company and the last date for receipt of postal ballot forms & e-voting was Monday, July 6, 2015 and the results were declared on Tuesday, July 7, 2015 at the Registered Office and Corporate Office of the Company. The Postal Ballot Forms, received within Thirty (30) days of despatch, were considered by the Scrutinizer. Advocate R. G. Ramani from Panaji, Goa was appointed as the Scrutinizer, to conduct the postal ballot voting process in a fair and transparent manner.
The postal ballot notice and the results were made available on the Company’s website www.vedantalimited.com and the Registrar & Transfer Agents, M/s Karvy Computershare, website https://evoting.karvy.com. According to the Scrutinizer’s report, the Resolutions were passed by the requisite majority. The details of voting results are given in Table - 9
Proposal for Postal Ballot:
The Company proposes to seek shareholders consent by way of Postal Ballot for increase in limits under Section 186 of the Companies Act, 2013 for Inter-Corporate Loans, Investments and Guarantees and security in connection with loan(s) from Rs. 60,000 Crore to Rs. 80,000 Crore. The Notice alongwith the explanatory statement shall be despatched to the shareholders. The Company shall comply with all requirements/regulations as per Companies Act, 2013 read with Rule 22 of the Companies Management and Administration) Rules, 2014 and Regulation 44 of SEBI Listing Regulations.
Means of Communication
One of the most important components of Corporate Governance is to communicate with the shareholders through effective means. Being a responsible corporate citizen, the Company supports the ‘Green Initiative’ undertaken by the Ministry of Corporate Affairs, Government of India, the Company, sends Annual Reports, Intimation for dividend payment, Notices related to General Meetings and Postal Ballot by email to those shareholders whose email ids are registered with the Company. They are also sent in hard copies to those shareholders whose email ids are not registered.
The financial results are published in the leading dailies ‘Economic Times’ (English Daily all editions) and Gomantak (vernacular language newspaper) and are also posted on the website for the information of shareholders’/Investors’. The Company organizes an earnings call with the analysts and investors on the day of announcement of results. Up-to-date financial results, annual reports, shareholding patterns, official news releases, financial analysis reports, schedule of analyst meet and other general information about the Company are available on the Company’s website www.vedantalimited.com.
Additional Shareholders’ Information
Annual General Meeting
Date: Wednesday, June 29, 2016
Time: 11.00 a.m. IST
Venue: Main Hall of Institute Menezes Braganza, Panaji, Goa - 403001, India
Financial Calendar for the year April 1, 2016 to March 31, 2017
Financial results forQ.E. June: July 29, 2015 End July 2016
Financial results forQ.E. September: October 27, 2015 End October 2016
Financial results forQ.E. December: January 28, 2016 End January 2017
Financial results forQ.E. March: April 28, 2016 End April 2017
The Board of Directors at its meeting held on October 27, 2015 approved an Interim Dividend of Rs. 3.50 per share (350%) on equity share of Rs. 1/- each. The Company had fixed Monday, November 2, 2015 as the record date which was paid before the due date. The Board of Directors have not recommended any final dividend.
The dates of book closure are Saturday, June 25, 2016 to Tuesday, June 28, 2016 (both days inclusive).
Listing on Stock Exchanges
As on March 31, 2016, the equity shares of the Company are listed on following stock exchanges:
Name of the Stock Exchange
BSE Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001
Code : 500295
ISIN code : INE205A01025
National Stock Exchange, of India Limited (NSE) Exchange Plaza, Plot No. C/1, G-Block, Bandra Kurla Complex, Bandra(East), Mumbai-400 051
Code : VEDL
New York Stock Exchange (NYSE) for American Depository Shares (ADS)
Code : VEDL
ISIN code: CUSIP ,92242Y100
1. The Non-Convertible Debentures of the Company are listed on the BSE Limited (BSE).
2. The listing fees for the equity shares (BSE and NSE) and Non-Convertible Debenture (BSE) have been paid for the Financial year 2017.
3. Listing fees for ADS will be paid by the Company for the year 2015-16 on receipt of the invoice.
Share Transfer System
The Board has authorised Registrar and Share Transfer Agents for processing of share transfers, which are approved by the Company’s Share & Debenture Transfer Committee. This Committee meets as and when required for approving the share transfers except those rejected on technical grounds.
Pursuant to Regulation 40(9) of the SEBI Listing Regulation, certificate has been issued by a Company Secretary-in- Practice for due compliance of share transfer formalities by the Company. Also, pursuant to Regulation 55A of SEBI (Depositories and Participants) Regulations, 1996, certification is done by a Company Secretary-in-Practice regarding timely dematerialisation of the shares of the Company Commodity price risk or foreign exchange risk and hedging activities
Fluctuation in commodity prices (including oil)
Impact - Prices and demand for the Group’s products are expected to remain volatile / uncertain and strongly influenced by global economic conditions. Volatility in commodity prices and demand may adversely affect our earnings, cash flow and reserves. Mitigation: Our Group has a well-diversified portfolio, which acts as a hedge against fluctuations in commodities and delivers cash flows through the cycle. We consider exposure to commodity price fluctuations to be an integral part of our Group’s business and its usual policy is to sell its products at prevailing market prices, and not to enter into price hedging arrangements other than for businesses of custom smelting and purchased Alumina, where back-to-back hedging is used to mitigate pricing risks. In exceptional circumstances, we may enter into strategic hedging but only with prior approval of the Executive Committee. The Group monitors the commodity markets closely to determine the effect of price fluctuations on earnings, capital expenditure and cash flows.
The CFO Committee reviews all commodity-related risks and suggests necessary course of action as needed by business divisions. Our focus is on cost control and cost reduction Currency exchange rate fluctuations
Impact: Our assets, earnings and cash flows are influenced by a variety of currencies due to the diversity of the countries in which we operate. Fluctuations in exchange rates of those currencies may have an impact on our financials. Although the majority of the Group’s revenue is tied to commodity prices that are typically priced by reference to the US dollar, a significant part of its expenses are incurred and paid in local currency. Moreover, the Group borrowings are significantly denominated in US dollars, while a large percentage of cash and liquid investments are held in other currencies, mainly in the Indian rupee. Any material fluctuations of these currencies against the US dollar could result in lower profitability or in higher cash outflows towards debt obligations.
Mitigation: We do not speculate in forex. We have developed robust controls in forex management to hedge currency risk liabilities on a back-to-back basis. The CFO Committee reviews our forex-related matters periodically and suggests necessary courses of action as may be needed by businesses from time to time, and within the overall framework of our forex policy. We, together with our business divisions, monitors regulatory and political developments on continuous basis. Our focus has been on communicating responsible mining credentials through representations of two Government and industry associations. We continue to demonstrate the Group’s commitment to sustainability through actively engaging with proactive environmental, safety and we seek to mitigate the impact of short-term movements in currency on businesses, by hedging short-term exposures progressively based on their maturity. However, large or prolonged movements in exchange rates may have a material adverse effect on the Group’s businesses, operating results, financial condition and/ or prospects.
De-materialisation of shares
Equity shares of the Company are traded only in dematerialised form w.e.f. May 31, 1999 as per notification issued by the Securities and Exchange Board of India (SEBI). 97.86% of the equity shares of the Company have been dematerialised as on March 31, 2016.
In June 2007 and July 2009, Vedanta Limited [erstwhile Sterlite Industries (India) Ltd.] issued 150,000,000 and 131,906,011 American Depository Shares (ADS), which are listed and traded on the New York Stock Exchange (NYSE). Pursuant to the Scheme of Amalgamation and Arrangement, American Depository Shares were listed with NYSE of which 228,184,620 representing ADS were outstanding as on March 31, 2016. As of the year end, there were eight (8) registered holders of the ADS’s. Citibank N.A., New York acts as the Depository for the ADS / ADR issued by the Company.
Pursuant to the SEBI Circular and Regulation 39 of the SEBI Listing Regulations, regarding the procedure to be adopted for unclaimed shares issued in physical form in public issue or otherwise, the Company has a separate demat account in the title of ‘Vedanta Limited – Unclaimed Suspense
Account with M/s Karvy Stock Broking Limited Contact Information
Company’s Registered Office Address
Vedanta Limited (earlier known as Sesa Sterlite Limited) Sesa Ghor, 20 EDC Complex, Patto, Panaji, Goa 403001, India Tel : 0832 2460601 / Fax : 0832 2460721 Email id : email@example.com Website: www.vedantalimited.com CIN : L13209GA1965PLC000044
Registrar and Transfer Agent
Karvy Computershare Private Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli Financial District, Nanakramguda Hyderabad – 500 032 Tel: +91 40 6716 2222 Fax: +91 40 2300 1153 Email: firstname.lastname@example.org
Mr. Rajiv Choubey Company Secretary & VP-Legal Tel : +91 0124 – 4593 000 email : email@example.com
Ashwin Bajaj Director Tel : +91 022 6646 1000 email : firstname.lastname@example.org
Ms. Roma Balwani President Tel : +91 022 6646 1000 email : email@example.com
Mr. Rajiv Choubey Company Secretary & VP-Legal Tel : +91 0124 – 4593 000 email : firstname.lastname@example.org
As per clause (c) of sub-regulation (1) of regulation 16 of SEBI Listing Regulations “material subsidiary” shall mean a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
A policy on Material Subsidiary has been approved by the Board of the Company and the same has been uploaded on the website of the Company and can be accessed at http://www.vedantalimited.com/media/85871/policy_for_ determing_material_subsidiaries_revised.pdf
As on March 31, 2016, there is no material unlisted subsidiary of the Company.
The subsidiary companies are managed by their separate Board of Directors, who are empowered to exercise all the duties and rights for efficient monitoring and management of the companies. The Company overseas and monitors the performance of subsidiary companies by following means:
i. The Audit Committee reviews the financial statements and, in particular the investments made by the subsidiary companies.
ii. The minutes of the Board Meeting of the subsidiary companies are placed before the Board of Directors of the Company for their review.
iii. A statement of all significant transactions of the subsidiary companies is placed before the Board of Directors of the Company for its review.
Materially Significant Related Party Transactions As per Section 188 of The Companies Act 2013 and Regulation 23 of SEBI Listing Regulations, all the Related Party transactions were at arm’s length price and the same were duly approved by the Audit Committee.
Sub-regulation (1) of Regulation 23 of SEBI Listing Regulations explains that “A transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity. “ Proper disclosures of the Key Managerial Personnel (KMP) relating to material financial and commercial transactions, where they and/or their relatives, have personal interest, were given to the Board of the Company.
A policy on Related Party Transactions has been approved by the Board of the Company and the same has been uploaded on the website of the Company and can be accessed at http://www.vedantalimited.com/media/77183/vedl_rpt_ policy.pdf
A comprehensive list of related party transactions as required under Accounting Standards (AS) 18 issued by Institute of Chartered Accountants of India (ICAI), forms part of Note no. 49 of the Financial Statements in the Annual Report. Non- compliance by the Company, penalties, strictures imposed by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets during the last three years
There has been no non-compliance by the Company or penalty, strictures imposed by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets during the last three years.
Vigil Mechanism / Whistle Blower Policy
The Audit Committee of the Company have formulated certain procedures to govern the receipt, retention, and treatment of complaints regarding the Company’s accounting, internal accounting controls or auditing matters, and to protect the confidential, anonymous reporting of director(s) or employee(s) or any other person regarding questionable accounting or auditing matters.
Whistle Blower Policy forms part of the Code of Business Conduct and Ethics and the same has been uploaded on the website of the Company and can be accessed at: http://www. vedantalimited.com/media/85907/coc_final_2015.07.29.pdf During the year, the concerns reported under this mechanism have been scrutinised and appropriate actions undertaken. It is also affirmed that no personnel has been denied access to the Audit Committee.
Discretionary Requirements as per Part E of Schedule
II under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
The Board The Board of the Company is chaired by an Executive Director who maintains the Chairman’s office at the Company’s expense.
As per the requirements, a half-yearly declaration of financial performance including summary of the significant events in last six-months, was sent to those shareholders whose email ids were registered.
Modified opinion(s) in audit report
There was no qualification by the auditors on the financial statements of the Company. Separate posts of Chairperson and Chief Executive Officer
The office of Chairman and Chief Executive officer of the Company are held by different individuals.
Reporting of internal auditor
As per the requirements, the internal auditor may report directly to the Audit Committee. The same is reported by briefing the Audit Committee through discussion and presentation of the observations, review, comments and recommendations etc. in the Internal Audit presentation by the Internal Auditor of the Company.
The Company has made all disclosures regarding compliance with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of subregulation (2) of regulation 46 of SEBI Listing Regulations, in