REPORT ON CORPORATE GOVERNANCE
Vedanta Limited aims to build sustainable value for its stakeholders. The goal of the Company is to create a world-class diversified natural resource company. The vision of the Company is to be the leading natural resources company and to build a progressive organization that all the stakeholders are proud of. Sustainability is at the core of Vedanta’s strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities. Through oversight, review, and counsel, the Board establishes and promotes Vedanta’s business and organisational objectives and works towards achieving the same.
Company Philosophy on Corporate Governance
Corporate governance essentially involves balancing the interests of the many stakeholders in a company – these include its shareholders, management, customers, suppliers, financiers, government and the community, the system of rules, practices and processes by which a company is directed and controlled. It is about promoting corporate fairness, transparency and accountability. It ensures:
• Adequate disclosures and effective decision making to achieve corporate objectives;
• Transparency in business transactions;
• Statutory and legal compliances;
• Protection of shareholder interests;
• Commitment to values and ethical conduct of business
The Company believes that its affairs shall be conducted by following
the best practices and principles, irrespective of its relation to the customers, employees, stakeholders or the community. Its Corporate Governance structure is based on the following principles:
• Trusteeship: A transparent and independent Board with a balanced composition and size can provide effective leadership to the Company. The Board is the trustee for all stakeholders.
• Aim: Accountability, independence, effective internal surveillance, voluntary legal compliance and governing rules and procedures drive the Company’s Corporate Governance.
• Entrepreneurship: The Company empowers the management and employees, especially women, to showcase strength, ownership, innovation and passion to excel and lead.
• Creating value: The Company undertakes efficient resource management to enhance enterprise value and return on investment.
• Concern and respect for people and environment: The Company works for the society and community.
Board of Directors
The Board of Directors (the “Board”) is the trustee to the stakeholders and is responsible for corporate strategy, drives strategic decisions, reviews major plans of action, including decisions concerning the Company’s capital, such as capital restructure, capital returns and security issue and buy backs, and so on. Besides, the plans of action also include risk policy, review and approval of annual budgets and business plans and monitor performance against corporate strategy on a regular basis.
Composition, Directorship and Meetings
As on March 31, 2015 the Board comprised of seven Directors with Mr. Navin Agarwal as Executive Chairman, Mr. Thomas Albanese Chief Executive Officer, Mr. Tarun Jain, Whole Time Director and Mr. Dindayal Jalan, Whole Time Director & Chief Financial Officer and three Independent Non-Executive Directors Mr. Naresh Chandra,
Mr. Ravi Kant and Ms. Lalita D. Gupte. Mr. Gurudas Kamat Independent Director ceased as a member of the Board effective January 27, 2015 on his demise. Pursuant to Clause 49 of the Listing Agreement, the Board of Directors of the Company shall have an combination of Executive and Non-Executive Directors and not less than fifty percent of the Board of Directors comprising non-executive Director. A vacancy of Independent Director was created on the demise of Mr. Kamat.
Ms. Anuradha Dutt was appointed as an Additional and Independent Director for a fixed term of three (3) years effective April 27, 2015 to April 26, 2018 subject to shareholders approval.
The names and categories of the Directors on the Board, their attendance at Board meetings during the year and at the last Annual General Meeting, as also the number of Directorships and Committee memberships held by them in other companies are given below in Table A.
During the FY 2014-15, six (6) board meetings were held and the gap between two meetings did not exceed one hundred and twenty days. The dates of the meeting held were April 29, 2014, July 29, 2014, September 5, 2014, October 29, 2014, January 29, 2015 and March 27, 2015.
(1) Mr. Navin Agarwal was appointed as Executive Vice Chairman on August 17, 2013 for a period of five (5) years till July 31, 2018. He was re-designated as Chairman of the Company effective April 1, 2014. (2) On the sudden demise of Mr. G. D. Kamat he ceased to be an Independent Director effective January 27, 2015.
(3) Ms. Anuradha Dutt was appointed as an Additional and Independent Director for a fixed term of three (3) years effective from April 27, 2015 to April 26, 2018 subject to shareholders approval.
(4) Mr. Thomas Albanese was appointed Whole-time Director designated Chief Executive Officer for a term of three (3) years effective April 1, 2014 to March 31, 2017. This appointment was approved by the shareholders at the 49th Annual General Meeting held on July 11, 2014.
(5) Mr. Tarun Jain was appointed Whole-time Director for a term of four (4) years effective April 1, 2014 to March 31, 2018. This appointment was approved by the shareholders at the 49th Annual General Meeting held on July 11, 2014.
(6) Mr. Dindayal Jalan was appointed Whole-time Director designated as Chief Financial Officer effective April 1, 2014 to September 30, 2014 which was approved by the shareholders at the 49th Annual General Meeting held on July 11, 2014. This was further extended for a term of two (2) years effective October 1, 2014 to September 30, 2016 which was approved by shareholders through postal ballot results dated October 11, 2014.
(7) The Independent Directors meets the criteria of being an Independent Director and an Independency certificate from them has been obtained.
(8) The Independent Directors do not serve as Independent Director in more than seven listed companies and none of the Whole
Time Directors serves as a Whole Time Director in more than three listed companies
(9) The Term of the Independent Directors namely Mr. Naresh Chandra, Mr. Ravi Kant and Ms. Lalita D. Gupte has been fixed for a period of three years, i.e. January 29, 2015 to January 28, 2018.
(10) None of the Independent Director is a member of more than ten committees or act as Chairman of more than five committees across all companies in which he / she is a member
(11) The Independent Directors of the Company meet the criteria of being an Independent Director as laid down in Clause 49 (II)(B) of the Listing Agreement.
The Board Meetings in the ensuing year are decided tentatively well in advance and communicated to the Directors. The agenda along with the explanatory notes are generally sent in advance to the Directors. Additional meetings of the Board are held when deemed necessary by the Board.
Information given to the Board
The Company’s Board is presented with detailed notes, along with the agenda papers. The Board periodically reviews the compliance status of all laws applicable to the Company, as certified by all the departmental heads as well as steps undertaken to rectify instances of non-compliances. The Company provides the following information to the Board through the agenda papers, presentations and discussions:
• Annual operating plans and budgets and any update thereof;
• Capital budgets and any updates thereof;
• Annual Accounts, Half-yearly and Quarterly results for the Company and operating divisions and business segments;
• Updates on all projects, formation of new special purposes vehicles and any new business being undertaken;
• Minutes of the meetings of the Audit Committee and other Committees of the Board;
• Information on recruitment and remuneration of senior officers just below the level of Board, including the appointment or removal of Chief Financial Officer and Company Secretary;
• Materially important show cause, demand, prosecution notices and penalty notices;
• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems;
• Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company;
• Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company;
• Details of any joint venture or collaboration agreement;
• Transactions that involve substantial payment towards goodwill, brand equity or intellectual property;
• Significant labour problems and their proposed solutions. Any significant development in human resources / industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme, etc.;
• Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business;
• Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material;
• Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer, etc.;
• Statement of significant transactions and arrangements entered by unlisted subsidiary Companies;
• Declaration of Dividend;
• General notices of interest of Directors;
• Internal audit findings (through the Audit Committee);
• Subsidiary companies minutes, financial statements, significant investments and other significant transactions and arrangements, if any.
As on March 31, 2015, the Company has 53 subsidiaries. The subsidiaries of the Company have their own independent Board and Management in place. The Board of the Company has oversight of the material subsidiaries of the company and periodical review of key decisions, expansion, major Capex, internal control etc. The minutes of the material subsidiaries is periodically presented to the Board.
Selection / Appointment procedure
The Nomination and Remuneration Committee (NRC) evaluates the balance of knowledge, skill, professional and functional expertise, industry orientation, gender, age etc. on the Board and, in the light of this evaluation, prepare and recommend to the Board, a description of the role and capabilities required for a particular appointment. The Committee in their nomination process and while making recommendations to the Board, endeavour to have an optimum combination of directors from different fields/walks such as Management, Legal, Finance, Marketing, Human Resources, Bureaucracy, Public Policy etc. and adequate representation of women directors on the Board.
Issuance of appointment letter to Independent Director -
The Directors, Mr. Ravi Kant was appointed in casual vacancy on January 28, 2014 and Mr. Naresh Chandra and Ms. Lalita D. Gupte were appointed in casual vacancy on March 29, 2014 as Independent Directors but were not specifically appointed under Section 149 of the Act for a fixed term, as the provisions were notified on April 2014. Subsequently, the Shareholders of the Company by way of Postal Ballot on March 30, 2015, approved the appointment of the Directors as Independent Directors for a fixed term of 3 (three) years with effect from the date of approval of appointment by the Board of Directors,
i.e., January 29, 2015 up to January 28, 2018, not liable to retire by rotation.
Mr. Gurudas Kamat, Non-Executive Independent Director, who was appointed on December 22, 2005 ceased as an Independent Director effective January 27, 2015 on account of his sudden demise. Ms. Anuradha Dutt was appointed as an Additional and Independent Director for a fixed term of three (3) years effective from April 27, 2015 to April 26, 2018 subject to shareholders approval
Separate meetings of Independent Directors
A separate meeting of the Independent Directors was held on March 27, 2015 wherein the Independent Directors discussed the process of evaluating the performance of the non-independent directors and the Board as a whole, performance of the Chairperson of the Company taking into account the views of executive directors and non-executive directors, assessed the quality, quantity and timelines of flow of information between the Company management and the Board for the Board to effectively and reasonably perform their duties.
Board Familiarisation and Induction Programme
The Familiarisation Programme (‘’the Programme”) for Independent Directors of the Company familiarises their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes.
The Company circulates news and articles related to the industry on a regular basis and may provide specific regulatory updates and provide an opportunity to the Independent Directors to interact with the senior leadership team of the Company and help them to understand the Company’s strategy, business model, operations, service, markets, organisation structure, finance, human resources, technology, quality, facilities and risk management and such other areas as may arise from time to time.
The Company further follows a system of ‘Orientation Programme’ for any new Director who joins the Company’s Board. The concerned Director is taken through an orientation process, which includes plant visits and detailed presentation of the process and business of the Company, meeting with unit level and Senior Management team. The information / details about the Company from its date of incorporation, its growth, corporate actions, corporate acquisitions and plant visits to understand better the operational activities are presented to the newly inducted Board members.
The Independent Director visited the Company’s Iron Ore unit and principal subsidiary Company Cairn India Ltd. Barmer location and Hindustan Zinc Ltd. Chanderiya and Aqucha mines.
Remuneration of Directors
Information on remuneration of directors during the year ended March 31, 2015 is set forth in Table B below.
Code of business Conduct and Ethics
The Company has a well-defined and approved ‘Code of Business Conduct and Ethics’ (‘Code of Conduct’ / ‘CoC’) applicable to all Board members, Senior Management and employees of the Company, which also includes the applicable provisions of the U.K. Bribery Act, 2010. The CoC is available on the Company’s website (www.vedantalimited.com). All Board members and Senior Management personnel have affirmed compliance with the Code.
The Chief Executive Officer (CEO) has also confirmed and certified the same (certification is enclosed at the end of this report). As an issuer of securities in the United States, the Company is subject to the US Foreign Corrupt Practices Act (FCPA). 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 all applicable anti-corruption laws, in doing business anywhere in the world. Pursuant to Clause 49 (II)(E)(3) the Code of Conduct was suitably amended incorporating the duties of Independent Directors as per the Act, 2013.
Vigil Mechanism / Whistle blower Policy
As part of the Code of Conduct, the Company has a Whistle blower Policy, where any instance of non-adherence to the Policy or any observed unethical behaviour is to be brought to the attention of the Group Head of Management Assurance Services. During the year, the concerns reported under this mechanism have been scrutinized and appropriate actions undertaken. It is also confirmed that no personnel has been denied access to the Audit Committee.
Accounting Treatment in preparation of financial statements
The financial statements of the Company have been prepared on an accrual basis under historical cost convention and in accordance with Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act, 2013.
Insider Trading Prohibition Policy
The Securities and Exchange Board of India vide notification dated January 15, 2015 notified The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 which shall be effective from May 15, 2015. The Company has amended its Insider Trading Prohibition Policy accordingly. The Company Secretary is the Compliance Officer.
The Company has instituted a comprehensive code of conduct for its directors, management and officers and the other connected persons with the Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information, guidelines and procedures to be made while dealing with shares of the Company including the consequences of violations if any. The code clearly specifies, among other matters, that the Directors and specified employees of the Company can trade in the shares of the Company only during ‘Trading Window Open Period’. The trading window is closed during the time of declaration of results, dividend and material events, etc. as per the Code. Disclosure of shareholding is taken from all the directors and Designated Employees and other connected persons of the Company.
Committees of The Board
The purpose of the Audit Committee (the “Audit Committee”) is to assist the Board with its oversight responsibilities. Section 177 of the Companies Act, 2013 (‘Act’) states that the Audit Committee of the Company shall act in accordance with the Terms of Reference (TOR) specified by the Board. In accordance of the above provisions of the Act and also taking into account the provisions of the Clause 49 of the Listing Agreement with the Stock Exchanges and NYSE Listing Manual, the Audit Committee will be responsible for the matters arising from terms of reference more particularly as stated in the
Audit Charter, approved by the Board of Directors.
The functions of the Company’s Audit Committee include:
• Oversight of the Company’s financial reporting process and the disclosure of its relevant 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 auditor 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 financial statements before submission to the Board for approval, with particular reference to:
• Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause (2c) of sub-section (3) of Section 134 of the Companies Act, 2013;
• Changes, if any, in accounting policies and practices and reasons for the same
• Major accounting entries involving estimates based on the exercise of judgment by management;
• Significant adjustments made in the financial statements arising out of the audit findings;
• Compliance with listing and other legal requirements relating to financial statements;
• Disclosure of any related party transactions;
• Qualifications in the draft audit report;
• Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
• Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, and so on), the statement of funds utilized for the purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoringagency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
• Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
• Approval or any subsequent modification of transactions with related parties;
• Scrutiny of inter-corporate loans and investments;
• Valuation of undertakings or assets of the Company, wherever it is necessary;
• Evaluation of internal financial controls and risk management systems;
• Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems of the Company;
• 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;
• Discussion with internal auditors 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;
• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
• Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors;
• Investigate any activity within its terms of reference and to seek any information it requires from any employee;
• Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, when considered necessary;
• Review of independence of auditors;
• Reviewing the implementation of applicable provisions of the Sarbanes-Oxley Act, 2002;
• Recommendation and appointment of the cost auditors;
• Reviewing the Company’s risk management policies and functioning of the Whistle blower Mechanism;
• Approval of appointment of Chief Financial Officer (CFO) (i.e. the Whole Time Finance Director or any other person heading the finance function or discharging that function) after assessing the candidate’s qualifications, experience and background, and others;
• Reviewing any changes in the accounting policies or practices, as compared to the last completed financial year, and commenting on any deviation from the Accounting Standards; and
• 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 the management;
• Management letters/letters of internal control weaknesses issued by the statutory auditors;
• Internal audit reports relating to internal control weaknesses; and
• Appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee.
The Company’s Audit Committee reviews the financial statements of the subsidiary companies, during the year. It also reviewed the investments made by the subsidiary companies, minutes of the Audit Committee meeting of those companies and statement of all significant transactions and arrangements entered into by the subsidiary companies. No Indian subsidiary of the Company falls under the term material non-listed Indian subsidiary as defined under Clause 49 of the Listing Agreement.
The Audit Committee is also appraised on information with regard to related party transactions by being presented with:
• A statement in summary form of transactions with related parties in the ordinary course of business;
• Details of material individual transactions with related parties, which are not in the normal course of business; and
• Details of material individual transactions with related parties or others, which are not on an arm’s length basis, along with the management’s justification for the same.
Composition, names of members and attendance during the year
As on March 31, 2015, the Audit Committee comprised of three Independent Directors.
Five Audit Committee Meetings were held during the financial year ended March 31, 2015 and the gap between two meetings did not exceed one hundred twenty days. The dates on which the Audit Committee Meetings were held are as follows: April 28, 2014, July 28, 2014, October 28, 2014, January 28, 2015 and March 27, 2015.
The Audit Committee Meetings are usually held at the Registered Office of the Company or Corporate Office in Mumbai and are attended by the CEO, Executive Director, Director Finance (Designate) and the representatives of Statutory Auditors and Internal Auditors.
The Company Secretary & AVP - Legal, acts as the Secretary to the Audit Committee. The representatives of the Statutory Auditors are permanent invitees to the meeting. They have attended all the meetings during the year.
Nomination and Remuneration Committee
The Nomination & Remuneration Committee establishes the principles for the selection of candidates to the Board of Directors, selects candidates for the election or re-election to the Board of Directors and prepares a proposal for the Board of Directors’ decision.
The scope of the Committee
• Assist the Board in identifying, interviewing and recruiting candidates including criteria for the independence evaluation of the Board of Directors;
• Annually evaluate and report to the Board on the performance and effectiveness of the Board to facilitate the directors fulfilling their responsibilities in a manner that serves the interests of members of the organisation;
• Obtain or perform an annual evaluation of the Committee’s performance and make applicable recommendations;
• Review, at least once a year, the independence of the members of the Board of Directors;
• Obtain or perform an annual evaluation of the Committee’s performance and make applicable recommendations;
• Review the framework and processes for motivating and rewarding performance at all levels of the organisation; the resulting compensation awards, and make appropriate proposals for Board approval. In particular, recommending all forms of compensation to be granted to Directors, senior management and other employees of the Company;
• Review of the Company’s Share Based Employee Benefit Scheme(s), if any, including overseeing the administration of the Scheme(s), formulating the necessary terms and conditions for such Scheme(s) like quantum of options/rights to be granted, terms of vesting, grant options/rights to eligible employees, in consultation with management; and allotment shares/other securities when options/ rights are exercised etc. and recommend changes as may be necessary; and
• Regularly review and make recommendations about changes to the charter of the Nominations Committee.
Composition, names of members and attendance during the year
As of March 31, 2015, the Nomination & Remuneration Committee comprised of Independent Directors & Non-Executive Directors Five Remuneration Committee Meetings were held during the financial year ended March 31, 2015 i.e. July 29, 2014, September 5, 2014, October 28, 2014, January 28, 2015 and March 27, 2015.
Managing and Executive Directors
The Company pays remuneration to its Whole-time Directors i.e. Chairman, CEO and CFO by way of salary, commissions, performance linked pay and perquisites and other benefit as per the terms agreed and executed with the Company. The remuneration is approved by the Board of Directors and is within the overall limits approved by shareholders of the Company.
Remuneration of the Non-Executive Directors of the Company by way of sitting fees and commission is decided by the Board of Directors. Payment of commission to any individual Non-Executive Director is determined by the Board and is broadly based on attendance, contribution at the Board Meetings and various Committee Meetings as well as time spent on various issues other than at these meetings.
The Company pays sitting fees of Rs. 50,000 per Board Meeting, Rs. 50,000 per Audit Committee Meeting and Rs. 10,000 for other Committee Meetings to the Directors other than the Whole-time Directors.
Policy determining material subsidiaries
A policy formulating for determining material subsidiaries has been approved by the Board of Directors of the Company to determine the material subsidiaries of the Company and to provide the governance framework for such material subsidiaries.
The Policy as given below :
• The Company, without the prior approval of the members by Special Resolution, shall not:
• dispose shares in Material Subsidiaries that reduces its shareholding (either on its own or together with other subsidiaries) to less than 50%; or cease the exercise of control over the Subsidiary; except in cases where such disinvestment is made under a scheme of arrangement duly approved by a Court / Tribunal.
• sell, dispose or lease the assets amounting to more than twenty percent of the assets of the material subsidiary on an aggregate basis during a financial year, unless the sale / disposal/ lease is made under a scheme of arrangement duly approved by a Court / Tribunal.
• All material subsidiaries of the Company shall endeavour to seek in principle approval of the Vedanta Board or the Committee of Directors of the Board of Vedanta on certain matters reserved for the Board of Vedanta.
• The Audit Committee of Board of the Company shall review the financial statements, in particular, the investments made by the unlisted subsidiary Company on an annual basis.
• The minutes of the Board Meetings of the Unlisted Subsidiary Companies shall be placed before the Board of the Company on periodical basis.
• The Management of the Company shall on a half yearly basis bring to the attention of the Board of Directors of the Company, a statement of all Significant Transactions and Arrangements entered into by the unlisted subsidiary company.
• The Management shall present to the Audit Committee annually the list of such subsidiaries together with the details of the materiality defined herein.
• One Independent Director of the Company shall be a director on the Board of the Material Non-Listed Indian Subsidiary Company. The detailed policy on the material subsidiaries is available on the Company’s website www.vedantalimited.com
Policy on dealing with Related Party Transactions
During the financial year, the Company entered into transactions with Related Parties defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement were done on arm’s length basis and in the ordinary course of business as per the Related Party Transaction Policy (RTP) of the Company, which was amended from time to time to align with the applicable laws/ regulations. The policy that is adopted in relation to RPT is given below and is available on the Company’s website www.vedantalimited.com
• Identification of Related Parties (RP) – disclosures by Directors / Key Managerial Personnel including holding and subsidiary companies, associate, joint ventures by reviewing the group structure.
• Identification of Related Party Transactions (RPT) – Transactions which are likely to be entered into with each related party and estimate value of such transactions before the beginning of each financial year to obtain necessary approvals in accordance with the policy.
• Identification of transaction, whether it is in the ordinary course of business – RPT that are a part of regular operating activities and connected financial activities among RP of any organization in similar business and size are considered to be in ordinary course of business.
Risk Management Committee
The purpose of the Risk Management Committee (RMC) of the Board of Directors (Board) of the Company is to assist the Audit Committee and the Board in fulfilling its Corporate Governance oversight responsibilities with regard to the identification, evaluation, and mitigation of operational, strategic and external environment risks. The Committee has overall responsibility for monitoring and approving the risk policies and associated practices of the Company.
RMC shall function in accordance with the terms of reference covered under this Charter, such additional provisions as may be stipulated under Listing Agreement with Stock Exchanges, the Companies Act, 2013 (the Act) and other statutes or any modification or reenactment thereof and best practices as may be specified by the Board from time to time.
Scope and Responsibility
• annually review and approve the Risk Management Policy and associated frameworks, processes and practices of the Company.
• ensure that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities.
• evaluate significant risk exposures of the Company and assess managements action to mitigate the exposures in a timely manner.
• coordinate its activities with the Audit Committee in instances where there is no overlap with audit activities.
• form and delegate authority to subcommittees when appropriate.
• make regular reports to the Board.
• have access to any internal information necessary to fulfill its oversight role. The Committee shall also have authority to obtain advice and assistance from internal or external legal, accounting or other advisors.
Composition, names of members and attendance during the year
As of March 31, 2015, the Risk Management Committee comprised of Independent Directors, Non-Executive Directors and Senior Executive.
Share Transfer Committee
The transfer of equity shares of the Company is approved by the Share Transfer Committee, which meets regularly to approve share transfers. The Committee comprises of the following Executive Director and Executives of the Company: The Share Transfer Committee members are Mr. D. D. Jalan, WTD & CFO, Mr. G.R. Arun Kumar, Deputy CFO and Mr. Rajiv Choubey, Company Secretary & AVP - Legal. There were 25 meetings held during the year ended March 31, 2015. The number of pending share transfers as on March 31, 2015 was Nil.
Corporate Social Responsibility Committee
The Company’s Corporate Social Responsibility (CSR) Committee was constituted at the Board Meeting held on March 29, 2014 effective April 1, 2014 with Mr. Naresh Chandra, Chairman, Mr. Ravi Kant, Mr. Thomas Albanese and Mr. Tarun Jain as members. The CSR Policy as recommended by the Committee was approved by the Board in its meeting held on July 29, 2014.
The primary function of the CSR Committee is to :
• Focus on the Committee’s area and the impact on the overall socio-economic growth and empowerment of the Indian people.
• Review the policy at regular intervals and recommend the amendment to the policy time to time.
• Recommend the amount of expenditure to be incurred on the activities referred as per the approved policy and the Companies Act, 2013.
The Notice dated September 5, 2014 was sent to the members of the Company and the last date for receipt of postal ballot forms and e-voting was Friday, October 10, 2014 and the results were declared on Saturday, October 11, 2014. 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 (www.sesasterlite.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 Notice dated February 20, 2015 was sent to the members of the Company and the last date for receipt of postal ballot forms & e-voting was Saturday, March 28, 2015 and the results were declared on Monday, March 30, 2015. 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 (www.sesasterlite.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
Additional Shareholders’ Information
Annual General Meeting
Date: Saturday, July 11, 2015
Time: 11.00 A.M.
Venue: Panjim Community Center Near Four Pillars Mala, Panaji, Goa
The dates of book closure are Wednesday, July 8, 2015 to Friday, July 10, 2015 (both days inclusive).
The Board of Directors in its meeting held on October 29, 2014 approved an Interim Dividend of Rs. 1.75 (175%) per share on equity share of Rs. 1/- each. The Company fixed Wednesday, November 5, 2014 as the record date which was paid before the due date.
The Board of Directors have recommended a final dividend of Rs. 2.35 per equity share for FY 2014-15. The dividend of Rs. 2.35 (235%) per equity share shall be paid on or before the due date, i.e. August 8, 2015, subject to approval by the shareholders at the Annual General Meeting to be held on July 11, 2015.
The total dividend including the interim dividend for FY 2014-15 is Rs. 4.10 per share
Company’s Registered Office Address
Vedanta Limited (earlier known as Sesa Sterlite Limited / Sesa Goa 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: 040 6716 2222 Fax: 040 2300 1153 Email: firstname.lastname@example.org
Rajiv Choubey Company Secretary & AVP-Legal Tel : 0124 – 4593 000 email : email@example.com
Institutional Investors / Analysts Ashwin Bajaj, Director Tel : 022 6646 1000 email : firstname.lastname@example.org
Roma Balwani, President Tel : 022 6646 1000 email : email@example.com
Rajiv Choubey Company Secretary & AVP-Legal Tel : 0124 – 4593 000 email : firstname.lastname@example.org
Means of Communication
In order to support the ‘Green Initiative’ undertaken by the Ministry of Corporate Affairs, the Company sent 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. Besides the Company also places all its Quarterly, Half Yearly, Annual Report, Notices to shareholders for their approvals, announcements, press releases, investor Analysts presentation are made available on the website of the Company www.vedantalimited.com. During the year, the quarterly results of the Company’s performance have been published in leading newspapers such as The Economic Times in English and in one of the local dailies, i.e. in the vernacular language. At the receipt of request for hard copies, they are also sent to the shareholders separately.
Pursuant to the SEBI Circular and Clause 5A of the Listing Agreement 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
Share Transfer System
The Registrar and Share Transfer Agents, Karvy Computershare Pvt. Ltd., Hyderabad, are authorised by the Board for processing of share transfers, which are approved by the Company’s Share Transfer Committee. This Committee meets fortnightly for the share transfer approval lodged of each deed except those rejected on technical grounds
Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchanges, on half-yearly basis, certificates have 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.
De-materialisation of shares
Trading in equity shares of the Company is permitted only in dematerialised form w. e. f. May 31, 1999 as per notification issued by the Securities and Exchange Board of India (SEBI). 97.82 % of the equity shares of the Company have been dematerialised as on March 31, 2015.
The Company had issued 5,000 Foreign Currency Convertible Bonds (FCCBs) aggregating to US$ 500 million which were convertible by bondholders into Shares, at any time on and after December 9, 2009, up to the close of business on October 24, 2014 or, if the Bonds shall have been called for redemption before the relevant maturity date, then up to the close of business on a date not later than seven business days prior to the date fixed for redemption thereof. During FY 2009-10 and FY 2010-11, total 2,832 bonds have been converted to 39,188,159 equity shares. No bonds have been converted during FY 2011-12, FY 2012-13 and FY 2013-14. These FCCBs has been redeemed on October 31, 2014.
Erstwhile Sterlite Industries (India) Limited (SIIL) has outstanding Foreign Currency Convertible Notes (FCCNs) to the tune of US$ 500 million. FCCNs are convertible into SIIL ADSs at a conversion rate of 42.8688 ADSs per US$ 1,000 principal amount of notes, which is equal to a conversion price of approximately US$ 23.33 per SIIL ADS. Post merger FCCNs of SIIL are convertible into Sesa ADSs at a conversion rate of 25.7213 ADSs per US$ 1,000 principle amount of notes which is equal to a conversion price of approximately US$ 38.88 per Sesa ADS. These FCCBs has been repaid on October 30, 2014.
In June 2007 and July 2009, erstwhile Sterlite Industries (India) Ltd issued 150,000,000 and 131,906,011 American Depository Shares (ADS), which are listed and traded in the New York Stock Exchange (NYSE). Pursuant to the Scheme of Amalgamation and Arrangement, American Depository Shares were listed with NYSE of which 221,331,788 representing ADS were outstanding as on March 31, 2015. As of the year end there were 9 registered holders of the ADS’s. Citibank N.A., New York acts as the Depository for the ADS / ADR issued by the Company.
Clause 49 defines a ‘material non-listed Indian subsidiary’ as an unlisted subsidiary, incorporated in India, whose income or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding Company and its subsidiaries in the immediately preceding accounting year. As on March 31, 2015, the Company has no such material non-listed subsidiaries.
All subsidiary companies of the Company are Board managed with their Boards having the rights and obligations to manage such companies in the best interest of their stakeholders The Company monitors performance of subsidiary companies, inter alia, by the following means:
(a) Financial statements, in particular the investments made by the unlisted subsidiary companies, are reviewed quarterly by the Audit Committee of the Company.
(b) All minutes of Board meetings of the unlisted subsidiary companies are placed before the Company’s Board regularly.
(c) A statement containing all significant transactions and arrangements entered into by the unlisted subsidiary companies is placed before the Company’s Board.
Materially Significant Related Party Transactions
The Board has received disclosures from Key Managerial Personnel relating to material financial and commercial transactions where they and or their relatives have personal interest.
Transactions with related parties are disclosed in note no. 49 of the Financial Statements in the Annual Report. In the opinion of the Board, the transactions during FY 2014-15 between Vedanta Limited and its subsidiaries have been done at arm’s length.
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
The Company has complied with all the requirements of regulatory authorities. No penalties or strictures were imposed on it by the stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years.
Compliance Report on Non-Mandatory requirements under Clause 49
The Board – The Chairman of the Company is an Executive Director and maintains the Chairman’s office at the Company’s expenses. Shareholder Rights – The Company sent to those shareholders whose email id was registered, a half yearly financials and performance of the Company. As per requirements, the half yearly financial results and production release was made available in the Company’s website www.vedantalimited.com
Audit Qualifications – There were no qualification by the auditors on the financial statements of the Company.
Separate posts of Chairman and CEO – The Company has a separate Chief Executive Officer.
Reporting of Internal Auditor – The Audit Committee is briefed through discussion and presentation the observations, review, comments, recommendations etc. through Internal Audit presentation by the Internal Auditor of the Company.
CEO/CFO Certification – The CEO and CFO certification pursuant to Clause 49 of the Listing Agreement certifying inter-alia that the financial statements do not contain any untrue statement and these represent a true and fair view of the affairs of the Company. The certification for the year is enclosed annexure forming part of the Annual Report