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
• The following persons are related as per the provisions of the Companies Act, 1956 ("the Act") :
Syt. Basant Kumar Birla and Smt. Manjushree Khaitan ;
Syt. Basant Kumar Birla and Shri Krishna Gopal Maheshwari
• Attendance of Directors at Meetings held during the Financial Year 2013-14
Four Board Meetings were held during the Financial Year ended 31st March, 2014 - on 27th April, 2013, 31st July, 2013, 12th November, 2013 and 14th February, 2014.
Besides Sitting Fees, Non-executive Directors are also entitled to a commission on profits. Since there was no profit during the Financial Year 2013-14, no commission is payable.
Apart from the above, no other pecuniary relationships or transactions vis-a-vis the Company exist with any Director.
• 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 the above individuals and the Company. Each Board Member and Senior Management staff declare their compliance with the Code of Conduct as at the end of each Financial Year. The required declarations in respect of the Financial Year 2013-14 have been received. 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
Terms of Reference
The Audit Committee has been mandated with the same terms of reference as specified in Clause 49 of the Listing Agreement with the Stock Exchanges. The terms of reference also conform to the requirements of Section 292A of the Act.
Composition, Names of Members and Chairman
As on 31st March, 2014 the Audit Committee had four non-Executive Independent Directors as Members. P K Mallik, who passed away on 26th February, 2014, was Chairman of the Committee.
Four Meetings were held during the Financial Year ended 31st March, 2014 — 26th April, 2013, 30th July, 2013, 11th November, 2013 and 14th February, 2014.
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.
c) the Cost Auditors, as and when necessary.
d) Kamal Chand Jain, Whole-time Director, Arvind Kumar Singh, Chief Executive Officer, Business Operations, Tridib Kumar Das, Chief Financial Officer, U. S. Asopa, Chief of Treasury and Accounts, Suresh Sharma, Head-Secretarial & Investor Services and Pankaj Jindal, Team Member-Treasury Operations.
The late Prasanta Kumar Mallik, who was Chairman of the Audit Committee till his demise on 26th February, 2014, was a past President of The Institute of Chartered Accountants of India and possessed expert knowledge in finance, accounting and audit.
Pesi Kushru Choksey, Amitabha Ghosh and Kashi Prasad Khandelwal, Members of the Committee are all senior Chartered Accountants with expert knowledge in finance, accounting and audit. Vinay Sah is a senior Executive of the Life Insurance Corporation of India and is financially literate.
4. REMUNERATION COMMITTEE
As on 31st March, 2014, the Remuneration Committee consisted of two non-executive Independent Directors as Members viz- P K Choksey and K P Khandelwal. The late P K Mallik, Independent Director, was also a Member of this Committee till his demise.
The Committee met once during the Financial Year 2013-14 on 11th November, 2013. P K Choksey chaired this Meeting.
The Company Secretary acts as Secretary to the Committee. The composition of the Committee and the attendance of each Member at Meetings were as follows:
The Committee essentially discharges the role assigned to it under Part II, Section II of Schedule XIII of the Act. As a part of this role, it approves, as per parameters set out in the law, the remuneration structure for Whole-time Director(s) in the event of the Company having no pofits/inadequate profits during a Financial Year.
5. SHAREHOLDER RELATED COMMITTEES
The Company has two Shareholder related Committees:
i) Share Transfer and Finance Committee of Directors
ii) Shareholders'/Investors' Grievance Committee of Directors
Details of these Committees are as follows :
• Share Transfer and Finance Committee
As on 31st March, 2014, the Share Transfer and Finance Committee of Directors consisted of K P Khandelwal, Independent Director and K C Jain, Whole-time Director. The late P K Mallik, Independent Director, was a Member and also the Chairman of the Committee till his demise.
The terms of reference of the Committee consist of considering for approval individual requests for transfer and transmission of shares in the physical form of 10,000 shares and above, issue of duplicate certificates and other shareholder related issues. It also deals with matters relating to finance.
• Shareholders'/Investors' Grievance Committee of Directors
As on 31st March, 2014, the Shareholders'/Investors' Grievance Committee of Directors consisted of K P Khandelwal, Independent Director and K C Jain, Whole-time Director. The late P K Mallik, Independent Director was a Member and also Chairman of this Committee till his demise.
The Committee met thrice during the Financial Year 2013-14 - on 21st November, 2013, 15th January, 2014 and 27th March, 2014. Late P K Mallik attended the first two Meetings. K P Khandelwal attended all three Meetings. K C Jain attended the Meeting held on 27th March, 2014.
The terms of reference of the Committee consist of review of Shareholder/Investor grievances.
6. COMPLIANCE OFFICER
Gautam Ganguli, Company Secretary, is the Compliance Officer under the Listing Agreement.
8. DISCLOSURES IN RELATION TO THE APPOINTMENTS AND RE-APPOINTMENTS OF DIRECTORS
As required under Clause 49(IV)(G)(i) of the Listing Agreement, brief profiles of Krishna Gopal Maheshwari, P. K. Choksey, Amitabha Ghosh, Kashi Prasad Khandelwal and Sudip Banerjee are appended :
i) Krishna Gopal Maheshwari, (91), was appointed a Director in July, 1963. He holds an intermediate degree in Arts. He is an industrialist and has more than six decades of rich experience in the fields of business and management. He is also a Director in Hyderabad Industries Limited, Jay Shree Traders Pvt. Ltd., Universal Chemical & Industries Pvt. Ltd., Universal Laboratories Pvt. Ltd., Reviera Investors Pvt. Ltd. and Universal Fine Chemicals Pvt. Ltd. He is not a Member of any Board Committee. His shareholding in the Company has been disclosed under paragraph 2 above.
ii) P. K. Choksey, (91), was appointed a Director in August, 1984. An eminent Chartered Accountant, he is a former Senior Partner of Price Waterhouse, Chartered Accountants. He is also an Independent Director of Zensar Technologies Limited and a Member of that Company's Audit Committee and Shareholders Grievance Committee. His shareholding in the Company has been disclosed under paragraph 2 above.
iii) Amitabha Ghosh, (83), was originally appointed a Director in February, 1984. A Chartered Accountant, with additional professional qualifications in Banking, he is a former Chairman and Managing Director of Allahabad Bank and a former Governor of Reserve Bank of India.
He is presently an Independent Director on the Boards of Orient Paper & Industries Ltd., Peninsula Land Ltd., Shreyas Relay Systems Ltd., Zenith Fibres Ltd., and Shreyas Shipping & Logistics Ltd.
He is the Chairman of the Audit Committees of Peninsula Land Ltd., Orient Paper & Industries Ltd., and Shreyas Shipping & Logistics Limited. He has no shareholding in the Company.
iv) Kashi Prasad Khandelwal (63), was appointed a Director in April, 2012. He is a practising Chartered Accountant with a Diploma in Information System Audit (DISA) and Computerised Accounting and Auditing Technologies (CAAT) from The Institute of Chartered Accountants of India. He is a Financial Audit Consultant of the World Bank and is associated with the Emergency Monrovia Urban Sanitation (EMUS) Project in Liberia. He is an Independent director of Balasore Alloys Limited and is also a Member of that Company's Audit Committee. He has no shareholding in the Company.
v) Sudip Banerjee (54), was appointed an Additional Director at a Meeting of the Board held in April, 2014. An Honours graduate in Economics, he has also obtained a Management Diploma from The All India Management Association. A respected professional in the area of Information Technology, he had an illustrious twenty five year career with Wipro Technologies Limited. He is also a former Chief Executive Officer of L & T Infotech Limited. He is at present an Independent Director of IFB Industries Limited. He has no shareholding in the Company.
i) Disclosure on materially significant Related Party transactions :
Details of Related Party transactions during the Financial Year 2013-14 have been set out under Note no. 43 of the Notes to the Financial Statements. None of these transactions have any conflict or potential conflict with the interest of the Company at large.
ii) Details of Non-compliance by the Company, penalties, strictures imposed on the Company by the Stock Exchanges, SEBI or any Statutory Authorities on any matter related to Capital Markets:
The Company has complied with all requirements of the Listing Agreement as well as the regulations and guidelines prescribed by Securities and Exchange Board of India ("SEBI") except one disclosure under clause 31(3) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. No penalties or strictures have been imposed by SEBI, Stock Exchanges or any other statutory authority on any matter relating to the Capital Markets during the last three years.
iii) The Company does not presently have a formal Whistle blower policy. However, no employee is denied access to the Audit Committee should a specific request to this effect be received.
iv) The adoption of the other non-mandatory requirements set out in Clause 49 of the Listing Agreement is under consideration.
10. MEANS OF COMMUNICATION
• 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 the Stock Exchanges where the Company's shares are listed and then published in various leading national newspapers, viz. Financial Express / Business Standard (English — all editions) and Dainik Statesman / Ekdin (Bengali editions). 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 the Shareholding Pattern etc. can also be accessed by investors from the Company's website www.kesocorp.com
• Management Discussion and Analysis :
The Management Discussion and Analysis, as reviewed by the Audit Committee, is part of this Annual Report.
11. GENERAL SHAREHOLDER INFORMATION
• Next AGM
Time: 11.00 A.M.
Date :8th July, 2014
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 :
1st July, 2014 to 8th July, 2014 (both days inclusive)
• Stock Exchange related information
a. Listing on Stock Exchanges:
The Equity Shares of the Company are listed on :
Phiroze Jeejeebhoy Towers, Dalal 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-700001.
Societe de la Bourse de Luxembourg, Societe Anonyme/R.C.B. 6222, B.P.165, L-2013 Luxembourg (for GDRs).
b. Stock Codes for:
Luxembourg Stock Exchange 492532205
There are no arrears in payment of Listing Fees.
c. ISIN No. for the Company's Equity Shares in Demat Form:
d. Depository Connectivity:
National Securities Depository Limited and Central Depository Services (India) Limited.
e. Registrars and Share Transfer Agents:
MCS Limited (Unit: Kesoram Industries Ltd.),
77/2A, Hazra Road, Kolkata-700 029
Phone Nos.: +91-33-24541892-93, 40724051-53
Fax No.: +91-33-24541961, 40724050 e-mail : firstname.lastname@example.org
f. Share Transfer System :
Subject to documentation being in order, transfer requests of Equity Shares in the physical form lodged with the Company/Registrars are processed no later than fifteen days from the date of receipt. Individual share transfer requests in physical form upto 10,000 shares are dealt with and approved at the level of Company Executives. Individual requests for transfers of shares in physical form in excess of 10,000 shares are referred to the Share Transfer and Finance Committee for consideration.
g. Dematerialisation and Rematerialisation :
Requests for Dematerialisation and Rematerialisation should be sent either to the Company's Registrars and Share Transfer Agents or to the Share Department at Birla Building, 8th Floor, 9/1 R N Mukherjee, Road, Kolkata-700 001.
h. Dematerialisation of shareholding :
The Company's Equity Shares are compulsorily traded in the dematerialisation form. 10,82,60,376 Equity Shares of the Company representing 98.63% of the total Equity Shares issued were held in dematerialised form as on 31st March, 2014. Investors have an option to dematerialise their Equity Shares either with National Securities Depository Limited or Central Depository Services (India) Limited.
i. Outstanding GDRs :
70,41,875 Equity shares of the Company were held as Global Depository Receipts as on 31st March, 2014.
j. Insider Trading :
The Company's Code of Procedure & Conduct formulated as per the SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended, is in full force and effect.
k. Plant Locations :
Section -Factory Location- City Office -Run under the name & style of
Factory Location- Sedam, Dist. Gulbarga Karnataka-585222
Phone : +91-8441-276005/277403, Fax : +91-8441-276139 E-mail: email@example.com
Storage and Packing Unit :
i) Survey No.296/7/4, IDA Bollaram Village, Jinnaram Mandel, Medak Dist. - 502325, Andhra Pradesh.
ii) T-3 MIDC Chincholi, Taluk : Mohal Solapur-413255, Maharastra State Phone : +91-217-2357060
City Office-10-3-316/2, Crystal Towers, 2nd Floor, Above Andhra Bank, Masab Tank, Hyderabad 500028, A. P.
Phone : +91-40-23342296/8056 Fax : +91-40-23344109/7821
Run under the name & style of- Vasavadatta Cement
Factory Location- Dist.Karimnagar Andhra Pradesh-505187
Phone :+91-8728-228122/228125/ 228156 Fax : +91-8728-228160 E-mail : firstname.lastname@example.org
City Office-10-3-316/2, Crystal Towers, 2nd & 3rd Floors,
Above Andhra Bank, Masab Tank, Hyderabad 500028, A. P. Phone : +91-40-23348896/7843/ 7613 Fax : +91-40-23344109/23347821
E-mail : email@example.com
Run under the name & style of- Kesoram Cement
Automobile Tyres and Tubes
Factory Location- i. At P.O. Chhanpur, Via.Kuruda, Dist. Balasore, Orissa, Pin.756056
Phone :+ 91-6782-255259/780/620 Fax : +91-6782-255225 E-mail: firstname.lastname@example.org
ii. Gram Khedimubarakpur,
Tehsil -Laksar, Dist.-Haridwar, Uttarakhand-247 663
Phone : +91-1332- 256000/256001 Fax :+91-1332- 255226 E-mail :email@example.com
City Office-7th Floor, Birla Building 9/1, R. N. Mukherjee Road, Kolkata-700001
Phone :+91-33-2262 4411-13, 22624355-57 Fax :+91-33-2262 4359 E-mail: ho@birlatyre. com
Run under the name & style of - Birla Tyres
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/ 26846457 Fax :+91-33-26846461
City Office- "Industry House", 11th Floor 10, Camac Street, Kolkata-700017
Phone : +91-33-22824721-24 Fax : +91-33-22828879 E-mail: firstname.lastname@example.org
Run under the name & style of - Kesoram Rayon
Spun Pipes & Foundries (under suspension of work)
Factory Location- P.O Adcconagar, Bansberia, Dist.Hooghly, West Bengal-712121 Phone : +91-33-26346465
City Office- "Industry House" 10, Camac Street, Kolkata-700017
Phone : +91-33-22822476 Fax :+91-33-22829370
Run under the name & style of - Kesoram Spun Pipes & Foundries
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 the name & style of - Hindusthan Heavy Chemicals
o. Address for Correspondence
(i) 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 given below:
Kesoram Industries Ltd.
8th floor, Birla Building, 9/1, R. N. Mukherjee Road,
Kolkata-700001 Phone No. : +91-33-22101545 Fax No. : +91-33-22109455
E-mail : email@example.com
Registrars & Share Transfer Agents :
MCS Limited (Unit: Kesoram Industries Ltd.),
77/2A, Hazra Road, Kolkata-700 029
Phone Nos.: +91-33-24541892-93/40724051-53 Fax No.: +91-33-24541961/40724050
E-mail : firstname.lastname@example.org
(ii) For Redressal of Complaints and Grievances:
The Company Secretary Telephone Nos. +91-33-22435453/22429454, 22135121
Kesoram Industries Limited Fax No.+91-33-2210-9455
8th Floor, Birla Building, E-mail : email@example.com
9/1, R.N. Mukherjee Road, Kolkata-700001.
12. 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.
B. K. Birla Chairman
Manjushree Khaitan Executive Vice Chairperson
K. C. Jain Whole-time Director
K. G. Maheshwari P. K. Choksey Amitabha Ghosh K. P. Khandelwal Vinay Sah Sudip Banerjee Directors
Arvind Kumar Singh Chief Executive Officer — Business Operations
Tridib Kumar Das Chief Financial Officer
Gautam Ganguli Company Secretary
Date : 29th April, 2014