REPORT ON CORPORATE GOVERNANCE:
Kalyani Steels has been practicing the principles of good Corporate Governance, over the years and lays strong emphasis on transparency and proper disclosures. The Company believes that timely disclosures, transparent accounting policies and strong Board go a long way in protecting shareholders trust while maximising long term corporate value. The Company recognises that good Corporate Governance is a continuing exercise and is in full compliance with the requirements under Clause 49 of the Listing Agreement with the Stock Exchanges.
This chapter of the report, plus the information given under 'Management Discussion and Analysis' and 'Shareholder Information' constitutes the compliance report of the Company on Corporate Governance during the year 2012-13.
1. BOARD LEVEL ISSUES
COMPOSITION OF THE BOARD:
As on 31st March, 2013, 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.
NUMBER OF BOARD MEETINGS:
During the year 2012-13, the Board of the Company met seven times on 26th May, 2012, 28th July, 2012, 8th August, 2012, 30th October, 2012, 15th December, 2012, 2nd February, 2013, and 26th March, 2013. All the meetings were held in such manner that the gap between two consecutive meetings was not more than four months.
Information Supplied to the Board
Among others, information supplied to the Board includes:
i. Annual operating plans and budgets, capital budgets and any update thereof
ii. Quarterly results for the Company
iii. Minutes of meetings of committees
iv. Details of Joint Venture / Collaboration Agreement
v. Sale of material nature of investments, assets, which is not in normal course of business.
vi. Non-Compliance of any regulatory, statutory nature or listing requirements etc. if any
vii. 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 2012-13.
As on 31st March, 2013, 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 2012-13 Audit Committee met on 7th May, 2012, 26th May, 2012, 8th August, 2012, 30th October, 2012 and 2nd February, 2013.
The functions of the Audit Committee of the Company include of the following:
i. 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.
ii. Recommending to the board, the appointment, re-appointment and if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
iii. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
iv. Reviewing, with the management, the annual / quarterly financial statements before submission to the board for approval.
v. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
vi. 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.
vii. Discussions with internal auditors on any significant findings and follow up thereon.
viii. 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.
ix. 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.
x. To look into the reasons for substantial defaults, if any, in the payment to the depositors, debentureholders, shareholders (in case of non payment of declared dividends) and creditors.
xi. Approval of appointment of CFO after assessing the qualifications, experience & background etc.
xii. 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:
i. Management discussion and analysis of financial condition and results of operations.
ii. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management.
iii. Management letters / letters of internal control weaknesses issued by the statutory auditors.
iv. Internal audit reports relating to internal control weaknesses.
v. The appointment, removal and terms of remuneration of the chief internal auditors.
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. No meeting of Remuneration Committee was held during the year 2012-13.
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.
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. B. Hattarki, Mr. S. S. Vaidya and Mr. M. U. Takale, Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Details of directors to be re-appointed, are given below:
Mr. B. B. Hattarki born on 10th October, 1941, is a Metallurgy and Mechanical Engineer. 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. Hattarki is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
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 32 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, Nandi Economic Corridor Enterprises Limited, Sharp India Limited, Nandi Highway Developers Limited, MRF Limited, Kalyani Investment Company Limited and Foundation Brake Manufacturing Limited. Mr. Vaidya is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
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 Carpenter Special Steels Limited, BF Investment Limited and Kalyani Technologies Limited. Mr. Takale is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
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.
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 2012-13, the Shareholders / Investors Grievance Committee met on 7th May, 2012, 8th August, 2012, 30th October, 2012 and 2nd February, 2013.
During the year four complaints were received, which were redressed. The status of complaints 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.
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: Wednesday, 24th July, 2013 at 11.00 a.m.
Venue: Registered Office of the Company at Mundhwa, Pune - 411 036
1st April to 31st March
The books will be closed from Saturday, 20th July, 2013 to Wednesday, 24th July, 2013 (both days inclusive).
Dividend of Rs. 1.50/- per Equity Share of Rs. 5/- each (i.e. 30%) would be payable on and from 5th August, 2013.
National Stock Exchange of India Limited (NSE)
BSE Limited (BSE)
Pune Stock Exchange Limited (PSE)
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, 2013, dematerialised shares accounted for 91.02% of the total Equity.
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 – 2605 1629 / 2605 0084
Telefax: 020 – 2605 3503
2) Kalyani Steels Limited
Mundhwa, Pune - 411 036
Phone No: 020-2671 5000 / 6621 5000
Fax No: 020-26821124