REPORT ON CORPORATE GOVERNANCE
Kalyani Steels recognises that good Corporate Governance is a continuing exercise and is committed to pursue higher standards of Corporate Governance in the overall interest of all the Shareholders. The Company has adopted practices mandated in Clause 49 of the Listing Agreement with the Stock Exchanges.
This chapter of the report, along with the information given under 'Management Discussion and Analysis' and 'Shareholder Information' constitutes the compliance report of the Company on Corporate Governance during the year 2013-14.
1. BOARD LEVEL ISSUES
COMPOSITION OF THE BOARD :
As on 31st March, 2014, the Board of Directors of Kalyani Steels comprised nine Directors. The Board consists of the Chairman, who is Promoter Non-Executive Director, one Executive Director and seven Non-Executive Directors, of which five are Independent. Details are given in Table 1.
NUMBER OF BOARD MEETINGS :
During the year 2013-14, the Board of the Company met five times on 24th May, 2013, 24th July, 2013, 30th October, 2013, 8th February, 2014 and 21st March, 2014. All the meetings were held in such manner that the gap between two consecutive meetings was not more than four months.
BOARD PROCEDURE :
Information Supplied to the Board
Among others, information supplied to the Board includes :
• Annual operating plans and budgets, capital budgets and any update thereof
• Quarterly results of the Company
• Minutes of meetings of committees
• Details of Joint Venture / Collaboration Agreement
• Sale of material nature of investments, assets, which is not in normal course of business.
• Non-Compliance of any regulatory, statutory nature or listing requirements etc. if any
• Materially important show cause, demand notices if any
The Board of the Company is presented with all the relevant information on various vital matters affecting the working of the Company as well as those matters, which require deliberation at the highest level. Board Members are given appropriate documents / detailed notes and information in advance of each Board and Committee Meeting.
DIRECTORS WITH MATERIALLY PECUNIARY OR BUSINESS RELATIONSHIP WITH THE COMPANY :
There has been no materially relevant pecuniary transactions or relationship between the Company and its non-executive and / or independent Directors for the year 2013-14.
AUDIT COMMITTEE :
As on 31st March, 2014, the Audit Committee of Kalyani Steels comprised four members, of which three are Independent Directors. All the members have accounting and finance management expertise. The Chairman of the Audit Committee is Mr.S.S. Vaidya. Mr.B.N. Kalyani, Mr.S.M. Kheny and Mr.B.B. Hattarki are the other members of the Committee.
The representatives of the Statutory Auditors, Internal Auditors and remaining Board Members are permanent invitees to the Audit Committee Meetings. The Secretary of the Company also acts as the Secretary of the Audit Committee.
During the year 2013-14 Audit Committee met on 24th May, 2013, 23rd July, 2013, 30th October, 2013 and 8th February, 2014.
The functions of the Audit Committee of the Company include of the following :
• 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.
• Recommending to the board, the appointment, re-appointment and if required, the replacement or removal of the statutory auditors and the fixation of audit fees.
• Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
• Reviewing, with the management, the annual / quarterly financial statements before submission to the board for approval.
• Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
• 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.
• Discussions with internal auditors on any significant findings and follow up thereon.
• 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.
• Discussions with statutory auditors before audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
• To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
• Approval of appointment of CFO after assessing the qualifications, experience & background etc.
• Carrying out any other function as is mentioned in the terms of reference of the audit committee. The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews :
• Management discussion and analysis of financial condition and results of operations.
• Statement of significant related party transactions (as defined by the Audit Committee), submitted by management.
• Management letters / letters of internal control weaknesses issued by the statutory auditors.
• Internal audit reports relating to internal control weaknesses.
• The appointment, removal and terms of remuneration of the chief internal auditors.
REMUNERATION POLICY :
The Remuneration Committee has been in place to recommend / review the remuneration packages of the Executive Director(s). The Remuneration Committee of Directors consists of three independent directors, namely Mr.S.M. Kheny, Mr.S.S. Vaidya and Mr.M.U. Takale. During the year 2013-14, Remuneration Committee met on 24th May, 2013.
The Managing Director is paid remuneration as per the terms approved by the Remuneration Committee and the Board and confirmed by the Shareholders of the Company. The remuneration of the Managing Director comprises of Salary, Commission and Perquisites besides contributions to provident fund, superannuation and gratuity and leave encashment facility. The Company does not have any stock option scheme.
The Non-executive Directors are paid sitting fees for attending each meeting of the Board and of the Committees thereof as specified by the Board. Each of the Non-executive Directors is paid sitting fee of Rs. 2,000/- per meeting attended by him. The Non-Executive Directors also draw remuneration in the form of commission based on net profits of the Company, as determined by the Board.
2. MANAGEMENT DISCUSSION AND ANALYSIS :
This Annual Report has a detailed chapter on Management Discussion and Analysis.
DISCLOSURES BY MANAGEMENT TO THE BOARD :
All disclosures relating to financial and commercial transactions where Directors may have a potential interest are provided to the Board and the interested Directors do not participate in the discussions nor do they vote on such matters.
DISCLOSURES REGARDING APPOINTMENT OR RE-APPOINTMENT OF DIRECTORS :
Mr.B.N Kalyani, Chairman and Mr.C.G. Patankar, Director of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
In view of Section 149 and other applicable provisions of the Companies Act, 2013, coming into effect from 1st April, 2014, it is proposed to appoint Mr.Arun Pawar, Mr.B.B. Hattarki, Mr.M.U. Takale, Mr.S.M. Kheny and Mr.S.S. Vaidya, as an Independent Directors of the Company for the period of five years with effect from 5th September, 2014 to 4th September, 2019. All the Directors being eligible, offered themselves for appointment. In the opinion of the Board, all the Directors fulfill the conditions specified in the Companies Act, 2013 and rules made thereunder, for their appointment as an Independent Director of the Company.
The details of the Directors to be appointed / re-appointed are given below :
Mr.B.N. Kalyani is Chairman and Managing Director of Bharat Forge Limited and Executive Chairman of Kalyani Carpenter Special Steels Limited. Mr.Kalyani, born on 7th January, 1949, is a Mechanical Engineer from the Birla Institute of Technology and Science at Pilani, Rajasthan. He is also M.S. in Engineering from the Massachusetts Institute of Technology, U.S.A. Mr.Kalyani also serves on the Board of BF Utilities Limited, Automotive Axles Limited, Alstom Bharat Forge Limited, BF-NTPC Energy Systems Limited, Merritor HVS (India) Limited, BF Investment Limited, Kalyani Alstom Power Limited, Impact Automotive Solutions Limited, Hikal Limited and Kalyani Hyes Lemmerz Limited.
Mr.C.G. Patankar, born on 6th June, 1956, holds a Bachelor's Degree in Science and he is a Chartered Accountant, having a rich experience of more than 35 years in Steel Industry. Mr.Patankar also serves on the Board of Kalyani Technoforge Limited, Kalyani International Limited, Kalyani Mukand Limited, Hospet Steels Limited, Spice Island Apparels Limited and Kalyani Investment Company Limited.
Mr.Arun P. Pawar born on 17th September, 1950, holds a Bachelor's Degree in Science and he has worked in the Indian Revenue Service (IRS:75), in the Income Tax Dept., for 36 years, having varied experience in Income Tax Assessment and Investigation along with General Administration. As Chief CIT & Commissioner, he had worked in Maharashtra (Thane & Mumbai) and in other states like Karnataka, Tamilnadu & Andhra Pradesh.
Mr.B.B. Hattarki born on 10th October, 1941, is a Metallurgy and Mechanical Engineer, having a rich experience of more than 50 years in Steel Industry. He also serves on the Board of Kalyani International Limited, Kalyani Mukand Limited, Hospet Steels Limited, BF Utilities Limited, Automotive Axles Limited, Khed Developers Limited, BF Investment Limited and Kalyani Investment Company Limited.
Mr.M.U. Takale, born on 18th August, 1960, is a Mechanical Engineer having more than 25 years experience in forging and automotive related industries. Mr.Takale, after having his initial graduation in Pune, completed his MS in Industrial and Systems Engineering from Columbia University, New York, U.S.A. and MBA from Western Carolina University, NC, U.S.A. He was in U.S.A. for six years and besides obtaining degree in Engineering and Management, has had considerable exposure to technological advancements in automotive field. He also has work experience in Automotive Industry in U.S.A. Mr.Takale serves on the Board of Kalyani Infotech Solutions Limited, Kalyani Technologies Limited and BF Investment Limited.
Mr.S.M. Kheny, born on 18th March, 1948 is Mechanical Engineer. Mr.Kheny serves on the Board of Kalyani Engineering & Construction Company Limited, Kalyani Highway Developers Limited, Kalyani Infrastructure Projects Limited, Kalyani Habitat Limited, Nandi Highway Developers Limited, Hospet Steels Limited, Hikal Limited and Hospet Power Limited.
Mr.S.S. Vaidya born on 9th August, 1955 is a Chartered Accountant. He is a partner of M/s Kunte & Vaidya, Chartered Accountants, Pune. He has been in practice for over 35 years and has vast experience in Corporate & Legal field, Tax Laws, Company Law, Foreign Exchange Laws etc. Mr.Vaidya also serves on the Boards of Bosch Chassis Systems India Limited, Nandi Infrastructure Corridor Enterprises Limited, Sahyadri Hospitals Limited, BF Utilities Limited, Sharp India Limited, Kalyani Investment Company Limited and Foundation Brake Manufacturing Limited.
COMMUNICATION TO SHAREHOLDERS :
Kalyani Steels puts all vital information relating to the Company and its performance, including quarterly, half yearly, yearly financial results, official announcements and communication to the investors and analysts on its website www.kalyanisteels.com regularly for the benefit of the public at large.
Quarterly, half yearly, yearly financial results are published in leading newspapers such as Business Standard (All Editions) and Loksatta (Pune) and are also sent to the Stock Exchanges immediately after they are approved by the Board.
Letters and Transfer Deeds received from shareholders are acted upon and replied promptly.
INVESTOR GRIEVANCES :
The Company has in place Shareholders' / Investors' Grievance Committee for redressing "Shareholders' / Investors' complaints. The Committee comprises of Mr.S.M. Kheny (Chairman), Mr.R.K. Goyal, Managing Director and Mr.B.B. Hattarki, Director. During the year 2013-14, the Shareholders / Investors Grievance Committee met on 24th May, 2013,
24th July, 2013, 30th October, 2013 and 8th February, 2014.
During the year one complaint was received, which was redressed. The status of complaint is also reported to the Board of Directors, as an agenda item. Mrs.Deepti R. Puranik, Company Secretary, is the Compliance Officer.
The Company has already provided separate E-mail ID for registering complaints by investors (firstname.lastname@example.org ) and the said E-mail ID is also displayed on the web-site.
SHARE TRANSFER :
The Company has constituted the 'Share Transfer Committee', which meets on weekly basis to approve share transfers, transmissions, consolidation, sub-division, issue of duplicate certificates and requests for dematerialisation of Company's shares. The Committee comprises of Mr.B.N. Kalyani, Chairman, Mr.B.B. Hattarki, Director and Mr.R.K.Goyal, Managing Director.
DETAILS OF NON-COMPLIANCE :
Kalyani Steels has complied with all the requirements of regulatory authorities. No penalties were imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter relating to the capital market during the period under report.
COMPLIANCE WITH MANDATORY AND NON-MANDATORY REQUIREMENTS :
The Company is fully compliant with the applicable mandatory requirements of the Clause 49 of the Listing Agreement. It has not adopted any non-mandatory requirements.
ANNUAL GENERAL MEETING :
Day and Date : Friday, 5th September, 2014 at 11.00 a.m. Venue : Registered Office of the Company at Mundhwa, Pune - 411 036
FINANCIAL CALENDAR :
1st April to 31st March
BOOK CLOSURE :
The books will be closed from Saturday, 30th August, 2014 to Friday, 5th September, 2014 (both days inclusive).
DIVIDEND DATE :
Dividend of Rs. 3/- per Equity Share of Rs. 5/- each (i.e. 60%) would be payable on and from 15th September, 2014.
National Stock Exchange of India Limited (NSE) BSE Limited (BSE) Pune Stock Exchange Limited (PSE)
STOCK CODES :
NSE : KSL BSE : 500235
PSE : KALST 6091
ISIN in NSDL and CDSL : INE907A01026
REGISTRAR AND TRANSFER AGENTS AND SHARE TRANSFER SYSTEM :
M/s. Link Intime India Private Limited, Block No.202, Akshay Complex, 2nd Floor, Off Dhole Patil Road, Near Ganesh Mandir, Pune - 411 001 are the Registrar and Transfer Agents of the Company and carry out the share transfer work on behalf of the Company. The Equity Shares of the Company are traded on the Stock Exchanges compulsorily in demat mode.
The Company's Equity Shares are under compulsory Demat Trading. As on 31st March, 2014, dematerialised shares accounted for 92.66% of the total Equity.
SITE LOCATION :
The integrated steel plant of the Company is located at Village Ginigera, Taluka and District Koppal, in the State of Karnataka.
INVESTORS CORRESPONDENCE ADDRESS :
1) Link Intime India Private Limited Registrar & Transfer Agent
Block No.202, Akshay Complex, 2nd Floor, Off Dhole Patil Road, Near Ganesh Mandir, Pune - 411 001
Phone No. : 020 - 26051629 / 26050084 Telefax : 020 - 26053503
E-Mail : email@example.com
2) Kalyani Steels Limited, Secretarial Department
Mundhwa, Pune - 411 036
Phone No. : 020-26715000 / 66215000 Fax No. : 020-26821124
E-mail : firstname.lastname@example.org