REPORT ON CORPORATE GOVERNANCE
1. GOVERNANCE PHILOSOPHY
The Company's philosophy on governance is founded upon and structured on a rich legacy of principles and practices that predicates dealings with stakeholders based on fairness, transparency and ethical behaviour. It seeks to assiduously build mutual trust and confidence as the basis for all working relationships with stakeholders. Implicit in this philosophy is also the recognition and demonstration of a two way communication between the Company and its stakeholders. While the Company welcomes constructive ideas and encourages dissent, it also acts fearlessly and with conviction.
2. BOARD OF DIRECTORS
i) Composition of the Board, Directorships & Committee positions held in other Companies and shares held as on 31st March, 2016:
As on 31st March, 2016, the Company had eight Directors. The composition of the Board complies with the provisions of the Companies Act, 2013 ("the Act"), the Listing Agreement and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The following persons are/were related as per the provisions of the Act:
Basant Kumar Birla and Manjushree Khaitan;
ii) Attendance of Directors at Meetings held during the Financial Year 2015-16
Ten Board Meetings were held during the Financial Year ended 31st March, 2016 on 29th April, 2015, 28th August, 2015, 12th September, 2015, 19th October, 2015, 6th November, 2015, 12thDecember, 2015, 19th December, 2015, 22nd January, 2016, 16th February, 2016 and 26th March, 2016.
iii) Code of Conduct
The Company has a Code of Conduct applicable to all Board Members and Senior Management staff for avoidance of conflict of interest between each of these individuals and the Company. Each Board Member and Senior Management staff have declared their compliance with the Code of Conduct as at 31st March, 2016. There were no materially significant transactions during the Financial Year with Board Members and Senior Management, including their relatives that had or could have had a potential conflict of interest with the Company.
The Code of Conduct is available on the website of the Company.
3. AUDIT COMMITTEE
i) Terms of Reference
The Audit Committee has been mandated with the same terms of reference as specified in Clause 49 of the Listing Agreement & Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms of reference also conform to the requirements of Section 177 of the Act.
ii) Composition, Names of Members and Chairman
As on 31st March, 2016 the Audit Committee had five Non-Executive Independent Directors as Members with Amitabha Ghosh as the Chairman of the Committee.
Eight Meetings were held during the Financial Year ended 31st March, 2016 on 29th April, 2015, 28th August, 2015, 19th October, 2015, 6th November, 2015, 12thDecember, 2015, 22nd January, 2016, 16th February, 2016 and 26th March, 2016.
The quorum for an Audit Committee Meeting is two Members personally present. The Company Secretary acts as the Secretary to the Audit Committee.
The following were invited to Audit Committee Meetings:
a) the Statutory Auditors.
b) the Internal Auditors, as and when necessary.
c) the Cost Auditors, as and when necessary.
d) Kamal Chand Jain, Whole-time Director; Arvind Kumar Singh, Chief Executive Officer-Business Operations; Enrico Malerba, Chief Business Officer; Tridib Kumar Das, Chief Financial Officer; U. S. Asopa, Chief of Treasury and Accounts and Suresh Sharma, Chief of Secretarial & Investor Services.
The late Pesi Kushru Choksey, who was Chairman of the Audit Committee till his demise on26th December, 2015, was a senior Chartered Accountant and a former Senior Partner of Price waterhouse and possessed expert knowledge in finance, accounting and audit.
Amitabha Ghosh and Kashi Prasad Khandelwal, Members of the Committee are senior Chartered Accountants with expert knowledge in finance, accounting and audit. Vinay Sah is a senior executive of the Life Insurance Corporation of India.
Lee Seow Chuan is a fellow member of the Association of International Accountants, UK. Sudip Banerjee is an Honours graduate in Economics and holds a Management Diploma from All India Management Association. All Members of the Committee are therefore financially literate.
The Chairman of the Audit Committee did not attend the last Annual General Meeting ("AGM") held on 12th December, 2015.
4. NOMINATION AND REMUNERATION COMMITTEE
i) Composition, Names of Members and Chairman
As on 31st March, 2016, the Nomination and Remuneration Committee consisted of four Members of whom, three were Non executive Independent Directors.
The Committee metthree times during the FinancialYear2015-16 on28th August, 2015,16th February, 2016 and26th March, 2016. Pesi Kushru Choksey was the Chairman of the Committee till his demise on 26th December, 2015. Thereafter, Amitabha Ghosh was appointed Chairman of the Committee on 22nd January, 2016.
The terms of reference of the Nomination and Remuneration Committee traverses the areas covered under Clause 49(IV) of the Listing Agreement, Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178 of the Act.
ii) The Nomination and Remuneration Policy:
This Policy formulated and recommended by the Committee to the Board was approved on 29th April, 2015. The Policy is attached as Annexure III to the Directors' Report.
The performance of individual Board Members including Independent Directors was subject to peer evaluation during the Financial Year.
5. STAKEHOLDERS'RELATIONSHIP COMMITTEE
i) Composition, Names of Members and Chairman
At its Meeting held on 29th April, 2014, the Board constituted a Stakeholders Relationship Committee.
The Committee met five times during the Financial Year 2015-16 on29th April, 2015,28th August, 2015, 12th December, 2015, 22nd January, 2016 and 26th March, 2016. Amitabha Ghosh chaired these Meetings.
The terms of reference of the Committee cover all the areas as mentioned under Clause 49(VIII) (E) (4) of the Listing Agreement, Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178 of the Companies Act, 2013.
ii) Shareholder complaints received and redressed during the Financial Year 2015-16:
6. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
As required under Section 135 of the Act, a Corporate Social Responsibility Committee was constituted on 29th April, 2014 with Amitabha Ghosh, Kamal Chand Jain as Members and Manjushree Khaitan as the Chairperson. The terms of reference of this Committee are aligned with the requirements of Section 135 of the Act.
The Committee met two times during the Financial Year 2015-16 on 29th April, 2015, and 16th February, 2016. Manjushree Khaitan chaired these Meetings.
The Company Secretary acts as Secretary to the Committee.
7. SEPARATE MEETING OF INDEPENDENT DIRECTORS
As per stipulations in Section VII of the Code for Independent Directors in Schedule IV of the Act and as per the Listing Agreement and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Meeting of the Company's Independent Directors was held on 6th November, 2015.
8. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The familiarisation programme for Independent Directors is available on the website of the Company under the weblink http://www.kesocorp.com/DOCS/management_corner. php#slide_6.
9. ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The annual evaluation exercise carried out by the Board during the year spanned its own performance, the performance of Board Committees as well those of individual Directors.
The evaluation process this year endeavoured to delve into unchartered territory. Realising that this was a year of transformation for the Company, the Board chose to deviate from conventional evaluation techniques by embarking on a mechanism that evaluated each Board Member's prowess in envisioning what lay ahead for the Company and the manner this linked with the performance of the Board as a whole and that of its Committees. The Board postulated that the raison d etre for its existence was governance and this process had to be rooted to the specifics of the transformation exercise. For, if the transformation was not successful, governance would be a casualty. Obviously, the requirement for perspicacity amongst individual Board Members and dovetailing this capacity in measuring the performance of the Board as a whole called for a fair amount of application of objectivity.
The conclusion reached was that each Board Member was able to offer implementable solutions to the issues before them. When debated at the Board level, interactions gave rise to meaningful dialogues that effectively projected the Board as an integrated whole. It was noted that each Board Committee contributed in equal measure to complement the role of the Board in the Company's governance process.
10. COMPLIANCE OFFICER
The Company Secretary, is the Compliance Officer under the Listing Agreement Regulation 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable SEBI Regulations and Rules.
12. DISCLOSURES IN RELATION TO THE APPOINTMENTS AND RE-APPOINTMENTS OF DIRECTORS
As required under Clause 49(VIII)(E)(1) of the Listing Agreement and Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, brief profiles of Basant Kumar Birla and Tridib Kumar Das are appended :
i) Basant Kumar Birla (Non-Executive Director) DIN 00055856: Basant Kumar Birla was appointed a Director of the Company in 1940. He is 95 years of age and an industrialist of repute. He has more than 70 years experience in several diverse businesses and is also associated with various charitable trusts and educational institutions. He is a Director of Century Enka Limited, Century Textiles & Industries Limited, Jay Shree Tea & Industries Limited, Pilani Investment & Industries Corporation Limited and BK Birla Foundation. He holds 402496 shares of the Company.
ii) Tridib Kumar Das (Executive, Whole time Director) DIN 01063824: Tridib Kumar Das, (59) has been the Company's Chief Financial Officer since 29.04.2014. He is a Chartered Accountant with additional qualifications as a Cost and Management Accountant. His experience spanning over three decades has covered finance, accounting, strategic planning, business analysis and business restructuring. After a stint with Castrol India Limited, he has spent much of his career with Philips as part of its senior management team both in India as well as Amsterdam. His last position in Philips was as a Board Member of Philips Electronics India Limited. He is a Director of Aditya Marketing & Manufacturing Limited and PIC Realcon Limited. He has no shareholding in the Company.
1. The Audit Committee at its Meeting held on 8th August, 2014 has approved the Related Party Transaction Policy which is placed on the website of the Company. The weblink is http://www.kesocorp.eom/DOCS/management_corner.php#slide_5.
2. Transactions with Related Parties, as per requirements of Accounting Standard 18 in the prescribed format of Para A of Schedule V of SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 are disclosed in the Notes to Accounts annexed to the Financial Statements. There are no materially significant transactions with Related Parties viz.
Promoters, Directors or the Management or their relatives or Subsidiaries that had or could have potential conflict with the Company's interest. Particulars of Related Party Transactions in terms of Section 188(l)(b) read with Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 has been disclosed in the Directors' Report.
3. The Company has complied with all relevant Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 while preparing the Financial Statements.
4. There are/were no pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company which has or could have potential conflict with the interests of the Company at large.
5. The Company has complied with all requirements of the Listing Agreement as well as the regulations and guidelines prescribed by the Securities and Exchange Board of India ("SEBI") except for non-submission of audited financial results for the financial year ended 31st March, 2015 under Clause 41(I)(d), unaudited quarterly results for the quarters ended 30th June, 2015 and 30th September, 2015 under Clause 41(I)(c) of the Listing Agreement with the Stock Exchanges within the stipulated time. The Company subsequently submitted the Audited Financial Results for the year ended 31.03.2015 and unaudited quarterly results for the above mentioned quarters and the paid the required penalties. The Company's shares were moved by the Stock Exchanges to the trade to trade category for a brief period during the year. This position was soon reversed. No other penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets during the last three years.
6. The Company has in place a mechanism to inform Board Members about risk assessment and mitigation plans and periodical reviews to ensure that critical risks are controlled by the executive management. No Risk Management Committee has been constituted since this is not mandated for the Company under the Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
7. As on 31st March, 2016, the Company had a material unlisted subsidiary. This Company ceased to be a subsidiary effective 13th April, 2016. The Policy on Material Subsidiaries is available on the Company's website for which the weblink is http://www. kesocorp.com/DOCS/management_corner. php#slide_5.
8. Independent Directors have confirmed to the Company that they meet the criteria of 'Independence' as stipulated under Clause 49 of the Listing Agreement and Regulation 16 (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
9. The Company has adopted a Whistle Blower Policy that has been placed on the website of the Company at the weblink http://www.kesocorp.com/DOCS/management_corner.php#slide_5. The Policy contains guidelines to be followed by whistle blowers. No person has been denied access to the Audit Committee.
10. Commodity price risks and foreign exchange risks are hedged from time to time in accordance with a Board approved Hedging Policy.
11. The Company has complied with Corporate Governance Requirements specified in Regulations 17 to 27 and Regulation 46(2)(b) to (i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
12. The status of compliance with non-mandatory recommendations of the Clause 49 of the Listing Agreement with Stock Exchanges and Part E of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided below:
a) Non-Executive Chairman's Office : The Non-Executive Chairman maintains an office at the Company's Head Office.
b) Shareholders' Rights : As the quarterly and half yearly financial performance are submitted to the Stock Exchanges, published in the news papers and posted on the Company's website, these are not sent to shareholders separately.
c) Audit Qualifications : The Company's financial statements for the year 2015-16 do not contain any audit qualification.
d) Separate posts of Chairman and CEO : The Chairman of the Board is a Non-Executive Director and his position is separate from that of the CEO.
e) Reporting of Internal Auditor : The Internal Audit Team reports to the Audit Committee.
14. MEANS OF COMMUNICATION
(i) Financial results, Annual Report etc.:
The quarterly Unaudited Financial Results and the Annual Audited Financial Results as approved and taken on record by the Board are sent to / filed with the Stock Exchanges where the Company's shares are listed and then published in various leading national newspapers, viz. Business Standard (English - all editions) and Dainik Statesman(Bengali edition). The Results are also posted on the Company's website www.kesocorp.com. All official releases and other related information are also displayed on this website.
The quarterly Unaudited Financial Results and the Annual Financial Results along with the Report on Segment Revenue, Results and Capital Employed, Balance Sheet, Statement of Profit & Loss, Directors' Report, Auditor's Report, Cash Flow Statement, Corporate Governance Report, Management Discussion and Analysis and Shareholding Pattern etc. can also be accessed by investors from the Company's website www.kesocorp.com.
(ii) Management Discussion and Analysis
The Management Discussion and Analysis, as reviewed by the Audit Committee, is part of this Annual Report.
15. GENERAL SHAREHOLDER INFORMATION
• Next AGM
Time 11.00 AM.
Date 28th July, 2016
Venue "Kala-Kunj", 48, Shakespeare Sarani, Kolkata-700 017
The Company's Financial Year
The Financial Year of the Company is from 1st April to 31st March.
Date of Book Closure
22nd July, 2016 to 28th July, 2016 (both days inclusive)
Stock Exchange related information
a. Listing on Stock Exchanges:
BSE Limited ("BSE"),
Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai-400 001
National Stock Exchange of India Limited ("NSE"),
Exchange Plaza, Bandra-Kurla
Complex, Bandra (E), Mumbai-400 051
The Calcutta Stock Exchange Ltd. ("CSE"),
7, Lyons Range, Kolkata-700 001
Societe de la Bourse de Luxembourg, Societe Anonyme/R.C.B. 6222, B.P. 165, L-2013 Luxembourg (for GDRs)
Privately-placed Secured Redeemable Non-Convertible Debentures
BSE Limited ("BSE"), Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai- 400 001
i) Equity Shares
Luxembourg Stock Exchange US4925322053
ii) Secured Redeemable Non- Convertible Debentures (privately placed)
There are no arrears in payment of Listing Fees
c. ISIN No. for the Company's Listed Securities
Equity Shares in Demat Form INE087A01019
Global Depository Receipts US4925322053
Secured Redeemable Non-Convertible Debentures (privately placed) INE087A07644
d. Depository Connectivity: National Securities Depository Limited and Central Depository Services (India) Limited.
e. Registrar and Share Transfer Agent:
MCS Share Transfer Agent Limited
(Unit: Kesoram Industries Ltd.)
12/1/5, Manoharpukur Road, Kolkata -700 026
Phone Nos.: +91 33 40724051 to 54 Fax No.: +91 33 40724050 E-mail: firstname.lastname@example.org
h. Share Transfer System
Subject to documentation being in order, transfer requests of Equity Shares in the physical form lodged with the Share Department of the Company/Registrar and Share Transfer Agent are processed no later than fifteen days from the date of receipt. Individual share transfer requests in physical form are dealt with and approved at the level of Company Executives.
j. Dematerialisation and Rematerialisation
Requests for Dematerialisation and Rematerialisation should be sent either to the Company's Registrar and Share Transfer Agents or to the Share Department of the Company at Birla Building, 8th Floor, 9/1 R. N. Mukherjee Road, Kolkata-700 001.
k. Dematerialisation of shareholding
The Company's Equity Shares are compulsorily traded in the dematerialisation form. 11,58,56,853 Equity Shares of the Company representing 98.80% of the total Equity Shares issued were held in dematerialised form as on 31st March, 2016. Investors have an option to dematerialise their Equity Shares either with National Securities Depository Limited or Central Depository Services (India) Limited.
l. Outstanding GDRs
70,41,875 Equity Shares of the Company were held as Global Depository Receipts as on 31st March, 2016.
m. Insider Trading
The Code of Internal Procedure & Conduct under the SEBI (Prohibition of Insider Trading) Regulations, 2015, has been effective 15th May, 2015 and the Company has implemented the same.
n. Plant Locations
Section Factory Location City Office Run under name & style of
Factory Location :Sedam, Dist. Gulbarga Karnataka-585222
Phone: +91-8441-276005/276391/277403 Fax: +91-8441-276139 E-mail: email@example.com
Storage and Packing Unit:
T-3 MIDC Chincholi, Taluk : Mohal Solapur -413255, Maharastra State
City Office :613 to 616, White House, Block III, 6th Floor, 6-3-1192/1/1, Kundanbagh Begumpet, Hyderabad - 500016 (Telangana)
Phone : +91-40-43344555 Fax: +91-40-43344534
Run under name & style of Vasavadatta Cement
Factory Location :Basantnagar, Dist. Karimnagar Andhra Pradesh-505187
Phone : +91-8728 -228152/228121 Fax: +91-8728-228160 E-mail: communication@kesoramcement. com
City Office 613 to 616, White House, Block III, 6th Floor, 6-3-1192/1/1, Kundanbagh Begumpet, Hyderabad - 500016 (Telangana)
Phone : +91-40-43344555 Fax: +91-40-43344534
Run under name & style of :Kesoram Cement
Section :Automobile Tyres and Tubes
Factory Location :At/P.O. Chhanpur, Via. Kuruda, Dist. Balasore, Odisha, Pin-756056
Phone: +91-6782-255259/780/620 Fax: +91-6782-255225 E-mail: btbls@ birlatyres.org
City Office 7th Floor, Birla Building 9/1, R. N. Mukherjee Road Kolkata-700001
Phone: +91-33-2262 4411-13 +91-33-22624355-57 Fax: +91-33-2262 4359 E-mail:ho@birlatyre. com
Run under name & style of : Birla Tyres
Section :Rayon & Transparent Paper*
Factory Location :P.O. Nayasarai, Rly. Station: Kuntighat, On Howrah-Katwa Route, Dist. Hooghly, West Bengal-712513
Phone: +91-33-26846431-34 Fax: +91-33-26846461 E-mail: firstname.lastname@example.org
City Office :"Industry House", 11th Floor 10, Camac Street Kolkata-700017
Phone : +91-33-22824721-24 Fax: +91-33-22828879 E-mail: email@example.com
Run under name & style of :Kesoram Rayon
Section :Spun Pipes & Foundries (under suspension of work)**
Factory Location :P.O. Adcconagar, Bansberia, Dist. Hooghly West Bengal-712121
City Office : "Industry House" 10, Camac Street Kolkata-700017
Phone : +91-33-22822476 Fax: +91-33-22829370
Run under name & style of :Kesoram Spun Pipes &Foundries
Section :Heavy Chemicals (under suspension of work)**
Factory Location :19, B. T. Road, Khardah, P.O. Balaram Dharma Sopan Kolkata-700116
Phone : +91-33-25535183
City Office :"Industry House" 10, Camac Street Kolkata-700017
Run under name & style of :Hindusthan Heavy Chemicals
o. Address for Correspondence
(a) For routine matters:
Any assistance regarding share transfer and transmission, change of address, non-receipt of dividend, duplicate / missing Share Certificate, demat and other matters, investors are welcome to get in touch with the Share Department of the Company at the address givenbelow:
Kesoram Industries Limited
8th Floor, Birla Building, 9/1, R. N. Mukherjee Road, Kolkata-700 001
Phone No.: +91 33 22101545 Fax No. : +91 33 22109455 E-mail :firstname.lastname@example.org
Registrar and Share Transfer Agent:
M/s. MCS Share Transfer Agent Limited
(Unit: Kesoram Industries Ltd.)
12/1/5, Manoharpukur Road, Kolkata 700 026
Phone Nos.: +91 33 40724051 to 4054 Fax No.: +91 33 40724050
For Redressal of Complaints and Grievances:
The Company Secretary
Kesoram Industries Limited
8th Floor, Birla Building 9/1 R. N. Mukherjee Road Kolkata-700001
Telephone Nos. : +91 33 22435453/ 22429454/ 22135121 Fax No. : +91 33 22109455 E-mail : email@example.com
16. CERTIFICATE FROM CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO)
A Certificate has been issued by the CEO and CFO as required under Clause 49(IX) of the Listing Agreement and Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
17. COMPLIANCE CERTIFICATE FROM A PRACTISING COMPANY SECRETARY
The Company has obtained a Certificate from a practising Company Secretary confirming that it is in compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement and Para C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Basant Kumar Birla Chairman
Tridib Kumar Das Whole-time Director & Chief Financial Officer
Manjushree Khaitan Executive Vice Chairperson
Enrico Malerba ChiefBusiness Officer
Amitabha Ghosh Directors
Kashi Prasad Khandelwal Directors
Gautam Ganguli Company Secretary
Sudip Banerjee Directors
Lee Seow Chuan Directors
Date: 25th May, 2016