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GAIL (India) Limited
Welcome To
PresentationOn
Company Secretariat
Functioning & Corporate
Governance
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GAIL- Vision & MissionVISIONVISION
Be the leading company in natural Be the leading company in natural gas and beyond with global focus, gas and beyond with global focus, committed to customer care, value committed to customer care, value
creation for all stakeholders and creation for all stakeholders and environment responsibilityenvironment responsibility
MISSIONMISSION
To accelerate and optimise the To accelerate and optimise the effective and economic use of effective and economic use of
Natural Gas and its fractions to Natural Gas and its fractions to the benefit of the national the benefit of the national
economyeconomy
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GAIL-Overview
GAIL is a Government Company, Navratna PSU under the administrative control of Ministry of Petroleum & Natural Gas (MoP&NG).
FY 2008-09 - Turnover– Rs. 23,776 crores, Profit After Tax – Rs.1,400 crores & Net-worth- Rs. 14,575 crores (Paid Share Capital + Reserve & Surplus).
Equity Shares of the Company are listed at Bombay Stock Exchange Limited (BSE); National Stock Exchange of India Limited (NSE) & GDRs are listed at London Stock Exchange.
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Functional Structure
SHAREHOLDERS
BOARD SUB-COMMITTEES
CMD
DIRECTOR (MARKETING)
DIRECTOR (FINANCE)
DIRECTOR(PROJECTS)
DIRECTOR (HR)
DIRECTOR (BD)
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Company Secretariat - Activities
Convening and conducting Board of Directors meetings
Convening and conducting Board Sub-Committees of meetings
Convening and conducting Shareholders meetings Compliance of listing agreements with Stock
Exchanges Payment of dividend to shareholders Investor Services Maintenance Preservation of employee/company related records for
safe custody
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Composition of BoardCompanies Act, 1956
Minimum - three and maximum – No Limit.
Company’s Articles
Minimum - three and maximum – twenty
All the Directors appointed by the President of India through the Ministry of Petroleum and Natural Gas.
Clause 49 of the Listing Agreement
Not less than 50% Board comprising of non-executive directors.
If Chairman is executive, at least half of the Board to comprise of independent directors.
If Chairman is non-executive, at least one third of the Board to comprise of independent directors.
Contd…
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Present strength
Functional Directors/Whole-time Directors (including CMD) - Six
Part–time Directors (Government Nominees) - Two
Part–time Non-official Directors (Independent) – Four
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Board Meeting
Provisions
To meet 4 times in a year.
Not more than 4 months to elapse between two meetings.
During FY 2008-09, 9 Board Meetings were held.
Related work Advance intimation to Directors wrt to date, time and
venue of meeting Sending of Agenda to all Board members well in advance Necessary arrangement for Directors No remuneration except payment of sitting fees @ Rs.
10,000 to Part–time Non-official Directors (Independent) Preparation of minutes
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Passing of Resolution by Circulation
Matter of an urgent nature- approval through circulation Draft Resolution and the necessary documents to be
circulated among Directors for approval Approved by majority of the Directors Certain matter circulation not allowed
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Sub-Committees of Board
Statutory Sub-Committees Audit Committee Shareholders/ Investor Grievance Committee
Other Sub-Committees
HR Committee
Redressal of Vendors’ Grievance Committee
Corporate Social Responsibility Committee
Ethics Committee
Contd…
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Business Development & Marketing Committee
Project Appraisal Committee
Share Transfer Committee
Empowered C&P Committee
Compensation Committee
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Annual Report Compilation of data/inputs for Annual Report-Directors’
Report, MDA, Financial statements etc.
Obtaining the approval of Board & also by shareholders
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Shareholders MeetingProvision Required to be held in each year and within six months
of the close of FY Interval of not more than fifteen months between two
AGMs
Related Work Necessary arrangements for AGM viz. booking of venue,
appointment of Event Manager, Registration counter for facilitating shareholders
Printing and dispatching of Annual Report to Shareholders at least 25 days before the date of AGM.
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Compliance of Listing Agreement and other
Statutory Compliances Advance intimation of date of Board meeting to Stock
Exchange Filing of various compliances with stock exchanges In case of approval of financial results, intimation within
15 minutes from the conclusion of the Board Meeting. In case of appointment of Directors:
- Obtaining of Director Identification Number. - Filing of Form 32 to Registrar of Companies - Welcome kit, inter-alia, containing Code of Conduct,
Insider Trading Code, Annual Report, MoA and AoA etc. to Directors
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Payment of Dividend
After approval by Board/Shareholder, dividend amount transferred within 5 days
Mode of Dividend Payment: Electronic Clearing Service (ECS), Dividend Warrant and Demand Draft
GAIL regularly pays dividend. For FY 2008-09, Board approved dividend @ Rs.7/- per
equity share Till date, Company paid dividend of more than Rs. 6,500
crores which includes more than Rs. 4,500 crores to Government of India
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Investor Services
Handling of investor grievances viz. non-receipt of dividend, transfer of shares, non-receipt of annual report etc.
Company has designated an exclusive e-mail ID viz. [email protected]
‘Investor Zone’ section on Company’s website
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Maintenance of Records
Agenda/Minutes of Board and Board sub-committee(s) meeting(s)
HBA agreements of employeesMoU & Agreements entered by CompanyShare certificates of JVs etc.
For fast retrieval, scanned and upload serially no.
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“Set of rules that are designed to govern the behaviour of corporate enterprises. ”
“Stepping into the shoes of the shareholders, stakeholders, vendors, suppliers & employees by the Top Managers and CEO of the company”
Corporate Governance?
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Need For Corporate Governance
Divorce between ownership and management
Concentrated ownership
Trust building
Optimum utilization of corporate resources
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Relevance Of Corporate Governance
Enhance stakeholders’ value on sustainable basis. Business becomes socially more responsible and
accountable. Creating wealth for organisation as well as nation at
large.
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Corporate Governance -Development
Historical Development - Abroad Under deliberation from last four decades. Cadbury Committee set up by London Stock Exchange Sarbanes-Oxley Act, 2002 International Financial Reporting Standards (IFRS) Financial Services Act , UK
In India Chamber of Indian Industry Kumar Mangalam Birla Committee N R Narayana Murthy Committee Naresh Chandra Committee
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Corporate Governance-Clause 49
Composition of Board Independent Directors Audit Committee CEO/CFO Certification Report on Corporate Governance
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Not less than 50% Board comprising of non-executive directors.
If Chairman is executive, at least half of the Board to comprise of independent directors.
If Chairman is non-executive, at least one third of the Board to comprise of independent directors.
Composition of Board
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Not having any material pecuniary relationship.
Not related to promoters.
Not an employee of the Company during three years.
Not a partner or executive during 3 years of statutory audit firm, internal audit firm, legal firms, consulting firms, having material association with the company.
Not a material supplier, service provider, customer, lessor, or lessee, affecting independence.
Not owning 2 % or more of voting shares.
Nominees Directors appointed by the institution deemed to be independent.
not less than 21 years of age.
Independent Director
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Board to periodically review the following information:
Legal compliance of all applicable laws.
Risk management policy on risk management and minimization procedures.
Formulation of code of conduct.
Certification by CEO/CFO about financial reporting.
Annual operating plans and budgets.
Roles and Responsibilities of Board
Contd…
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Financial/ quarterly results.
Minutes of sub-committees of the Board.
Details of any joint venture agreements.
Foreign exchange exposures to limit the risk of adverse exchange rate movement.
Shaw-cause, demand, penalty notices, significant labour problems.
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Audit Committee
Minimum 3 (three) Directors. Two-third to be an independent directors. All members to be financially literate to read and
understand basic financial statements. At least one member to have accounting or financial
expertise (professionally qualified or officer with financial oversight responsibilities).
Chairman to be an independent director.
Contd…
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Chairman to be present in AGM.
Finance Director, Head of Internal Audit and
representative of Statutory Auditor to be invited.
Company Secretary to act as Secretary. To meet 4 times in a year. Not more than 4 months to elapse between two
meetings. Quorum to be two members or one third, whichever is
greater, with two independent directors present. During FY 2008-09, 8 meetings held
Contd…
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Roles and Powers of Audit Committee
To investigate any activity within its terms of reference To seek information from any employee To obtain outside legal or other professional advice To secure attendance of outsiders with relevant expertise To review quarter/annual financial statements To review the adequacy of internal audit function To review the functioning of the whistle blower
mechanism To review significant related party transactions To review appointment, removal and terms of
remuneration of chief internal auditor
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Shareholders/ Investors Grievance Committee
Constituted as per clause 49.
Chaired by Independent Director and two functional Directors.
To specially look into the redressal of grievances of shareholders/investors.
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Subsidiary Companies
At least one Independent Director on the Board of holding Company shall be a Director on Board of material non listed Indian subsidiary Company.
Financial statements, in particular, investment made by the unlisted subsidiary Company shall reviewed by the Audit Committee of the listed holding Company.
Minutes of the Board Meetings shall be placed at the Board Meeting of the listed holding Company.
Management should periodically bring to the attention of the Board of listed holding Company, a statement of all significant transactions and arrangements entered into by subsidiary Company.
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CEO/CFO Certification
Reviewed financial statements and the cash flow statement
No transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.
Accept responsibility for establishing and maintaining internal controls for financial reporting
Disclosed to the auditors and the Audit Committee, changes in internal control, accounting policies, instances of significant fraud etc.
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Compliance Report On Corporate Governance
• Separate section on Corporate Governance in the Annual Report
• Compliance with mandatory and non-mandatory requirement
• Quarterly compliance report to the Stock Exchange • Certificate from the Statutory Auditors for the FY