COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
At Rama Steel Tubes Limited (“RAMA”), Corporate Governance is all about maintaining a valuable relationship and trust with all stakeholders. We believe that it is imperative for us to manage our business affairs in the most fair and transparent manner with a firm commitment to our values. For us, corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. Our corporate governance framework is a reflection of our culture, our policies, our relationship with stakeholders and our commitment to values. Accordingly, we always seek to ensure that our performance is driven by integrity. This is vital to gain and retain the trust of our stakeholders.
Our corporate governance framework ensures effective engagement with our stakeholders and helps us evolve with changing times.
The Securities and Exchange Board of India (SEBI) amended the Listing Agreement effective October 1, 2014, to bring in additional corporate governance norms for listed entities. These norms provide for stricter disclosures and protection of investor rights, including equitable treatment for minority and foreign shareholders.
The amended rules required companies to get shareholders' approval for related party transactions, establish whistleblower mechanisms, elaborate disclosures on pay packages and have at least one woman director on their boards. The amended norms are aligned with the provisions of the Companies Act, 2013, and are aimed to encourage companies to ‘adopt best practices on corporate governance’.
Our corporate governance framework ensures that we make timely disclosures and share accurate information regarding our financials and performance, as well as the leadership and governance of the Company.
We believe, Corporate Governance is not just a destination, but a journey to constantly improve sustainable value creation. It is an upward-moving target that we collectively strive towards achieving.
A majority of the Board, 3 out of 5, are Independent Directors. At RAMA, it is our belief that an enlightened Board consciously creates a culture of leadership to provide a long-term vision and policy approach to improve the quality of governance. The Board’s actions and decisions are aligned with the Company’s best interests. It is committed to the goal of sustainably elevating the Company’s value creation. The Company has defined guidelines and an established framework for the meetings of the Board and Board Committees. These guidelines seek to systematise the decision-making process at the meeting of the Board and Board Committees in an informed and efficient manner.
The Board critically evaluates the Company’s strategic direction, management policies and their effectiveness. The agenda for the Board reviews include strategic review from each of the Board committees, a detailed analysis and review of annual strategic and operating plans and capital allocation and budgets. Additionally, the Board reviews related party transactions, possible risks and risk mitigation measures, financial reports from the CFO and
business reports from each of the sector heads. Frequent and detailed interaction sets the agenda and provides the strategic roadmap for the Company’s future growth.
Best Corporate Governance Practices
RAMA maintains the highest standards of Corporate Governance. It is the Company’s constant endeavour to adopt the best Corporate Governance practices keeping in view the international codes of Corporate Governance and practices of well-known global companies. Some of the best implemented global governance norms include the following:
- The Company has a designated Lead Independent Director with a defined role.
- All securities related filings with Stock Exchanges and SEBI are reviewed every quarter by the Company’s Stakeholders’ Relationship Committee of Directors.
- The Company has independent Board Committees for matters related to Corporate Governance and stakeholders’ interface and nomination of Board members.
Role of Company Secretary in Overall Governance Process
The Company Secretary plays a key role in ensuring that the Board (including committees thereof) procedures are followed and regularly reviewed. The Company Secretary ensures that all relevant information, details and documents are made available to the Directors and senior management for effective decision-making at the meetings. The Company Secretary is primarily responsible to assist and advise the Board in the conduct of affairs of the Company, to ensure compliance with applicable statutory requirements and Secretarial Standards, to provide guidance to directors and to facilitate convening of meetings. He interfaces between the management and regulatory authorities for governance matters.
BOARD OF DIRECTORS
Board composition and category of Directors
The Company’s policy is to maintain optimum combination of Executive and Non-Executive Directors. The composition of the Board and category of Directors are as follows:
Mr. Richi Bansal is the son of Mr. Naresh Kumar Bansal. None of the other directors are related to any other director on the Board.
Selection of new directors
The Board is responsible for the selection of new directors. The Board delegates the screening and selection process involved in selecting new directors to the nomination and remuneration committee. The nomination and remuneration committee in turn makes recommendations to the Board on the induction of any new directors.
Code of Conduct
The Company has in place a comprehensive Code of Conduct (the Code) applicable to all the employees and Non-executive Directors including Independent Directors. The Code is applicable to Non-executive Directors including Independent Directors to such extent as may be applicable to them depending on their roles and responsibilities. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company viz. - Customer Value, Ownership Mind-set, Respect, Integrity, One Team and Excellence.
A copy of the Code has been put on the Company’s website (www.fence-steeltubes.com). The Code has been circulated to Directors and Management Personnel, and its compliance is affirmed by them annually.
A declaration signed by the Company’s Chairman and Managing Director is published in this Report.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF BOARD
Number of Board meetings held with dates
Thirteen Board meetings were held during the year, as against the minimum requirement of four meetings. The details of Board meetings are given below:
ATTENDANCE OF DIRECTORS AT BOARD MEETINGS, LAST ANNUAL GENERAL MEETING (AGM) AND NUMBER OF OTHER DIRECTORSHIPS AND CHAIRMANSHIPS / MEMBERSHIPS OF COMMITTEES OF EACH DIRECTOR IN VARIOUS COMPANIES:
Currently, the Board has three committees: the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee.
- Audit Committee
Our audit committee (‘the committee’) comprised four Directors as on March 31, 2015 :
The Committee’s composition meets with requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Members of the Audit Committee possess financial / accounting expertise / exposure.
Role of the Audit Committee:
- Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are 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 being included in the Directors Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act.
- 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 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 half yearly and annual 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, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.
- Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
- Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
- Discussion with internal auditors on any significant findings and follow up there on.
- 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.
- To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors.
- To review the functioning of the Whistle Blower mechanism, in case the same is existing.
- Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.
- To overview the Vigil Mechanism of the Company and took appropriate actions in case of repeated frivolous complaints against any Director or Employee.
Powers of the Audit Committee:
- Investigating any activity within its terms of reference;
- Seeking information from any employee;
- Obtaining outside legal or other professional advice; and
- Securing attendance of outsiders with relevant expertise, if it considers necessary.”
2. Stakeholders’ Relationship Committee
The committee has the mandate to review and redress shareholder grievances. Our stakeholders relationship committee (‘the committee’) comprised Four directors as on March 31, 2015 :
The Stakeholder Relationships Committee shall oversee all matters pertaining to investors of our Company. The terms of reference of the Stakeholder Relationships Committee include the following:
- Redressal of shareholders’/investors’ complaints;
- Reviewing on a periodic basis the Approval of transfer or transmission of shares, debentures or any other securities made by the Registrar and Share Transfer Agent;
- Issue of duplicate certificates and new certificates on split/consolidation/renewal;
- Non-receipt of declared dividends, balance sheets of the Company; and
- Carrying out any other function as prescribed under the Listing Agreement.”
3. Nomination and Remuneration Committee
Our Nomination and Remuneration Committee (‘the committee’) comprised Four directors as on March 31, 2015 :
The terms of reference of the Nomination and Remuneration Committee include the following:
- To recommend to the Board, the remuneration packages of the Company’s Managing/Joint Managing/ Deputy Managing/Whole time / Executive Directors, including all elements of remuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);
- To be authorized at its duly constituted meeting to determine on behalf of the Board of Directors and on behalf of the shareholders with agreed terms of reference, the Company’s policy on specific remuneration packages for Company’s Managing/Joint Managing/ Deputy Managing/ Whole time/ Executive Directors, including pension rights and any compensation payment;
Meetings of Board Committees held during the year and Directors’ attendance:
The Company does not have any subsidiary company as on 31.03.2015
GENERAL BODY MEETINGS
Annual General Meeting
During the preceding three years, the Company’s Annual General Meetings were held at 15/1, 2nd Floor, Asaf Ali Road, New Delhi-110002. The date and time of the Annual General Meetings held during last three years, are as follows :
No special resolution was passed in any of the last three AGMs.
Extra-ordinary General Meeting
Extra-ordinary General Meeting of the members of the RAMA was held on Saturday, August 30, 2014 at 11:30 a.m. at 15/1, 2nd Floor, Asaf Ali Road, New Delhi-110002 and Special resolution(s) passed for :
- Increase in Authorized Share Capital and Alteration of Memorandum of Association
- Issue of Bonus Shares by the Company
No resolution was passed through postal ballot during last 3 financial years ended on March 31, 2013, March 31, 2014 and March 31, 2015.
WHISTLE BLOWER POLICY
The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a Whistle Blower Policy under which employees are free to report violations of applicable laws and regulations and code of conduct.
MEANS OF COMMUNICATION
Quarterly/half-yearly/annual results: The quarterly, half-yearly and annual results of the Company are published in “Financial Express” and “Jansatta”. The results are are displayed on the Company’s website “www.fence-steeltubes.com”.
Website: The Company’s website (www.fence-steeltubes.com)contains a separate dedicated section “Investor Desk”.
Annual Report: The annual report containing, inter alia, Audited Financial Statements, Directors’ Report, Auditors’ Report and other important information is circulated to members and other entitled thereto. The Management Discussion and Analysis (MD&A) Report forms part of the Annual Report and are displayed on the Company’s Website.
SEBI Complaint Redress System (SCORES): The investors complaints are processed in a centralized web-based complaint redress system.
- Related Party transactions
All material transactions entered into with related parties as defined under the Act and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business. These have been approved by the audit committee.
- Details of non-compliance by the Company, penalties, strictures imposed on the Company by the stock exchanges or the securities and exchange board of India or any statutory authority, on any matter related to capital markets, during the last three years 2012-13, 2013-14 and 2014-15 respectively: NIL
- The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and directors to report concerns about unethical behaviour. No person has been denied access to the chairman of the audit committee. The said policy has been also put up on the website of the Company at the following link -
- The Company has fulfilled the following non-mandatory requirements as prescribed in Annexure XIII to the Clause 49 of the Listing Agreements entered into with the Stock Exchanges:
- Half-yearly financial performance of the Company including a summary of the significant events in the six month period ended September 30, 2014 was sent to every member in October 2014 at their registered address.
- The statutory financial statements of the Company are unqualified.
- Mr. Rajkumar Malik, the internal auditors of the Company, make presentations to the audit committee on their reports.
- Reconciliation of share capital audit:
A qualified practicing Company Secretary carried out a share capital audit to reconcile the total admitted equity share capital with the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The audit report confirms that the total issued / paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
- Code of Conduct:
The members of the board and senior management personnel have affirmed the compliance with the Code applicable to them during the year ended March 31, 2015. The Annual Report of the Company contains a Certificate by the CEO and Managing Director in terms of Clause 49 of the listing agreement based on the compliance declarations received from Independent Directors, Non-Executive Directors and Senior Management.
GENERAL SHAREHOLDER INFORMATION
b) Distribution of Equity Shareholding as on March 31, 2015
87.66% of the Company’s paid-up Equity Share Capital has been dematerialized up to March 31, 2015.
CERTIFICATE ON COMPLIANCE WITH CODE OF CONDUCT
I hereby confirm that the Company has obtained from all the members of the Board and Management Personnel, affirmation that they have complied with the Code of Conduct for the financial year 2014-15.
(Naresh Kumar Bansal)
Chairman & Managing Director
September 4, 2015
CEO / CFO CERTIFICATION UNDER CLAUSE 49 (IX)
The Board of Directors
Rama Steel Tubes Limited
We have reviewed financial statements and the cash flow statements of Rama Steel Tubes Limited for the year ended 31st March, 2015 and to the best of our knowledge and belief:
- these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
- these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s Code of Conduct.
We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of Company’s internal control systems pertaining to financial reporting. We have not come across any reportable deficiencies in the design or operation of such internal controls.
We have indicated to the Auditors and the Audit Committee:
- that there are no significant changes in internal control over financial reporting during the year;
- that there are no significant changes in accounting policies during the year; and
- that there are no instances of significant fraud of which we have become aware.
Chief Financial Officer
Naresh Kumar Bansal
Chairman & Managing Director
September 4, 2015
CERTIFICATE ON CORPORATE GOVERNANCE
To the Members
Rama Steel Tubes Limited
We have examined the compliance of conditions of corporate governance by M/s Rama Steel Tubes Limited for the year ended 31st March, 2015 as stipulated in Clause 49 of the Listing Agreement of the said Company with The Delhi Stock Exchange Limited.
The compliance of the conditions of the corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof adopted by the Company ensuring the compliance of the corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to explanation given to us we certify that the Company has complied with the conditions of corporate governance as stipulated in the above Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For M/s VAPS & Co.
Firm Registration No.: 003612N
Membership No. – 082498
September 4, 2015