The Sterlite Group believes in fair and transparent policy in all its business dealings and corporate affairs. The Group maintains highest ethical standards in its dealings with all its stakeholders which are key to ensure business success. In this endeavour, the Group constantly reviews its systems and procedures to achieve the highest level of corporate governance while fulfilling the role of a responsible corporate representative committed to sound corporate practices. Sterlite has adopted Corporate Governance related practices as mandated in Clause 49 of the Listing Agreement and other established procedures and systems to strengthen the governance system.
Board of Directors
The Company believes that sound corporate governance is essential in achieving the Group’s strategy to create a world class metals and mining organisation and generate strong financial returns. The Board is aware of the need for a strong corporate governance framework in the current climate and the need not only to reflect the changing nature of the Group’s businesses but the environment in which it operates..
The company’s Board of Directors (‘Board’) comprises of seven Directors, viz.,
Mr. Anil Agarwal, Chairman (Non-Executive),
Mr. Navin Agarwal Executive Vice-Chairman are the two promoter Directors,Mr. Din Dayal Jalan is the Whole-time Director. In addition to the promoter directors, there are four Non-Executive Independent Directors, viz., Mr. Gautam Doshi, Mr. Berjis Desai Mr. Sandeep Junnarkar and Mr.A.R.Narayanaswamy. More than fifty percent of the directors are independent directors. All the Independent Directors meet the independence criteria as required under Clause 49 of the Listing Agreement.
In 2011-12, the Board of the company met nine times. The Board reviews, approves the Company's strategic, operational and financial plans, guides corporate strategy, takes key strategic decisions, reviews the major plans of action, i.e. decisions concerning the capital of the company, including capital restructure, capital returns and security issue and buy backs etc., risk policy, review, approve annual budgets and business plans and monitor performance against corporate strategy.
Committees of the Board
The Board Committees focus on specific area and make informed / appropriate decisions within the authority delegated to each Committee guided by its charter, which defines the composition, scope, responsibilities and powers of the Committee. The Committee also make specific recommendations to the Board on various matters from time to time. All observations, recommendations and decisions are placed before the Board for information and their approval / consent.
The Audit Committee met six times during the course of the year. CEO, CFO and representatives of the Statutory Auditors and Internal Auditors are regularly invited by the Audit Committee to its meetings. The Company Secretary is the Secretary to the Committee. The functions of the Audit Committee of the company include the following:
Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible
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 quarterly financial and annual financial statements before submission to the Board for approval
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 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.
Reviewing the company's risk management policies and functioning of the Whistle Blower Mechanism.
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.
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.
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Audit Committee is empowered, pursuant to its terms of reference to investigate any activity within its terms of reference and to seek any information it requires from any employee.
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.
The Audit Committee of the Company reviews the financial statements of the subsidiary companies, during the year, the Audit Committee also reviewed the investments made by the subsidiary companies, minutes of the Board meeting of the subsidiary 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.
Shareholders'/Investors' Grievances Redressal Committee
The Shareholders' Grievance Redressal Committee of the Company reviews matters related Grievances of shareholders and investors. The Committee primarily focuses on review of investor complaints and its redressal, queries received from investors i.e. transfer of shares, issue of share certificates, non-receipt of Annual Report, non-receipt of declared dividends etc and reviews the Report presented by Share Transfer Agent of the Company.
The company has appointed, M/s. Karvy Computershare Private Limited, as its Registrar and Share Transfer Agent, who are fully equipped to carry out share transfer activities and redress investor complaints. Company Secretary is the Compliance Officer for redressal of all shareholders' grievances.
Nominations Governance and Remuneration Committee
The Company's Remuneration Committee is responsible for recommending the fixation and periodic revision of remunerations (including commissions and/or incentives, etc) of Whole-Time Directors/Executive Directors. This is done after reviewing their performance based on pre-determined evaluation parameters and the Company policy of rewarding achievements and performance.
Payment of remuneration to the Executive Vice-Chairman, Managing Director and Whole-time Director is governed by the respective agreements executed between them and the Company and are governed by Board and shareholders' resolutions. The remuneration structure comprises of Salary, commission linked to profits, perquisites and allowances and retirement benefits (pension, superannuation and gratuity).
Share / Debenture Transfer Committee
The Board of Directors have delegated the power to approve share/debenture transfers, transmission and consider split / consolidation requests to the Share / Debenture Transfer Committee. The Share / Debenture Transfer Committee were reconstituted with new members' viz.
Mr. P.Ramnath (CEO- Copper), Mr.Sridhar Narasimhan (VP-Finance)
and Mr. Rajiv Choubey, Company Secretary & Head Legal. The Share/Debenture Transfer Committee met 12 times during the year.
Finance Standing Committee
The Finance Standing Committee (erstwhile Banking & Authorisation Committee) consisted of Directors & Officials of the Company, namely Mr.Navin Agarwal, Mr.Din Dayal Jalan, Mr.Tarun Jain, Mr. M.S Mehta and Mr.C.Prabhakaran. The Charter of the Committee authorises on behalf of the Company, any changes in authorised signatories for banking operations, delegation of powers for day to day excise and sales tax matters, authorisation to specific employees for certain contractual obligations and such other delegation as may required. The Committee meet once during the year.
Disclosures by Management to the Board
All disclosures relating to financial and commercial transactions where Directors may have a potential interest are provided to the Board, and the interested Directors do not participate in the discussion nor do they vote on such matters.
Disclosure of Accounting Treatment in Preparation of Financial Statements
Sterlite has followed the guidelines of accounting standards referred to in Section 211(3C) of the Companies Act, 1956 including Accounting Standard (AS)-30 on 'Financial Instruments : Recognition and Measurement' and Limited revision arising out of it in other Accounting Standards, issued by 'The Institute of Chartered Accountants of India'.
Code of Prevention of Insider Trading Practices
In compliance with the SEBI regulation on prevention of insider trading, Sterlite has instituted a comprehensive code of conduct for its Directors, management and officers. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of the Group, and cautioning them of the consequences of violations. The code clearly specifies, among other matters, that Directors and specified employees of Sterlite can trade in the shares of the Group 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. A yearly disclosure is taken from all the Directors and Designated employees of the Group. The Company Secretary is the Compliance Officer.
The investor complaints are monitored on quarterly basis by Investor Grievance Committee. The Complaints are handled by Karvy Computer Share (P) Ltd.
Number of complaints received during the year from the investors comprising of Non receipt of Dividend/Interest Warrants, Non receipt of securities, Non receipt of Annual Report, shares sent for transfer and transmission, complaints received from SEBI etc.- 1599
Number of complaints resolved - 3784
Complaints Pending as at 31st March 2012 - 0
Number of cases of share Transfers pending for approval as at 31st March 2012 - 0
Disclosure on material financial and commercial transactions with Senior Management
Disclosures on materially significant related party transactions i.e., transactions of the Group of material nature, with its Promoters, the Directors or the management, their relatives, or subsidiaries, etc. that may have potential conflict with the interests of the Company at large. None of the transactions with any of the related parties were in conflict with the interest of the Company.
Transfer of unclaimed dividend to Investor Education and Protection Fund (IEPF)
As per the provisions of Sec. 205A(5) of the Companies Act, 1956 all unpaid / unclaimed for a period of seven years from the date of transfer to 'unpaid Dividend Account' of the Company is credited to the Investor Education and Protection Fund.
Statutory Compliance, Penalties and Strictures
The Company has complied with the requirements of the Stock Exchanges/SEBI and Statutory Authority on all matters related to capital markets during the last three years. No penalties or strictures have been imposed on the Company by these authorities in the last three years.
As part of 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 Head of Management Assurance Services. During the year, the concerns reported under this mechanism have been scrutinised and appropriate actions taken. It is also confirmed that no personnel has been denied access to the Audit Committee.
The company is fully compliant with the applicable mandatory requirements of Clause 49.
Code of Business Ethics & Conduct
The Company has a well defined and approved 'Code of Business Ethics & Conduct' applicable to all Board members, Senior Management and employees of the company. The code of business ethics and conduct is available on the website of the company (www.sterlite-industries.com). All Board members and Senior Management personnel have affirmed compliance with the code of business ethics and conduct.
Communication to Shareholders
Sterlite puts forth key information about the company and its performance, including quarterly results, official news releases, and presentations to analysts, on its website www.sterlite-industries.com regularly for the benefit / information of the public at large. 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 the vernacular/regional languages as well. Hence, they are not separately sent to individual shareholders. Sterlite, however, furnishes the quarterly and half-yearly results on receipt of a request from any shareholder.