CORPORATE GOVERNANCE

Corporate Governance deals with laws, practices and implicit rules that determine a company’s ability to take informed managerial decision vis-a vis its Stakeholders – in particular, its shareholders, creditors, customers, the State and employees. The NEEPCO management acts in the best interest of all its stakeholders at all times and has adopted good Corporate Governance practices to benefit the greatest number of Stakeholders.

Philosophy On Code Of Governance

  • To have adequate control system in operation and provide information to the Board on a timely basis in a transparent manner so as to enable the Board to monitor the performance and ensure accountability of the Management.
  • To increase the efficiency of Business Enterprise for creation of wealth of the Enterprise and Country as a whole.
  • To ensure that Employees and Board subscribe to the Corporate values and apply them in their conduct.

1. Composition Of Board And Particulars Of Directors

(I) Composition of Board:

The Board of Directors of the Company (“the Board”) consists of 11 (Eleven) Directors, including 4 (four) Whole-Time Directors, 1 (one) Nominee Govt. of India, 1(one) Nominee of NER state government and 5(five) Independent Directors.

(II) Non-Executive Director’s Compensation & Disclosures:

The Company pays sitting fees to Non-Executive Independent Directors.

(III) Board Meetings, Committee Meetings & Procedures:

  • Minimum four Board Meetings are held in each year. Apart from the four scheduled Board Meetings, additional Board Meeting can be convened by giving appropriate notice. In case of business exigencies or urgency of matters, resolution is passed by circulation.
  • The Board of Directors is given presentation covering Project Implementation and operations of the Company at each Board Meeting. The information is being placed before the Board in accordance to DPE guidelines. The Company has held at-least one Board Meeting in each quarter of the year.
  • The Board of Directors also reviews from time to time legal compliance report presented by the Company Secretary.

2. Code Of Conduct :

The Company is committed to conducting business in accordance with the highest standard of business ethics and complying with applicable laws, rules and regulations.

Code of Conduct - Click on the link for details

3. Risk Management Policy :

The Board of Director in its 175th Board Meeting held on 28.06.2010 has approved the Risk Management Policy. Risk Management Policy was implemented w.e.f. the year 2011-12.

4. Training Of Board Members :

The Board members are provided necessary documents / brochures, reports and internal policies to enable them to familiarize with company’s procedure and practice.

5. Audit Committee

The Audit Committee was constituted in the year 2001. The Committee meets atleast three times in a year, and once in six months. The meetings are also attended by Director (Finance), Head of the Internal Audit and Statutory Auditotrs as Special Invitees. The Company Secretary acts as the Secretary to the Committee.

The minutes of the Audit Committee are placed before the Board for information. The terms of reference of the Committee as under:-

  • Review of the Corporation’s financial reporting process and the disclosures made in its financial reports to ensure that the financial statements are sufficient, correct and credible.
  • Review of the half-yearly and annual financial statements before submission to the Board, focusing primarily on the following:
    • Any change in accounting policies and practices
    • Major accounting entries based on exercise of judgment by management
    • Qualification in draft audit report.
    • Compliance of all legal requirements concerning financial statements.
  • Review of the adequacy of internal control systems.
  • Review the adequacy of internal audit function, including the structure of the internal audit department, staffing of the department, reporting structure, coverage and frequency of internal audit.
  • Recommend fixation of audit fee and also approval of payment for any other services of external auditors in accordance with Sec 224(8)(aa), as amended by the Companies (Amendment) Act, 2000.
  • Appointment and fixing of remuneration of Cost Auditors in terms of Section 233B of the Companies Act
  • Discuss with internal auditors on any significant findings and follow up thereon.
  • Review 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.
  • Discuss with external auditor before the audit commences regarding nature and scope of audit and have post-audit discussions to ascertain any area of concern.
  • Review the company’s financial and risk management policies.

6. Directors Remuneration

The company being a Central Public Sector Undertaking, the appointment, tenure and remuneration of Directors are decided by the President of India. Hence, the Board does not decide remuneration of the Directors. Independent Directors are paid only sitting fees at rate fixed by the Board for attending the Board Meetings as well as Committee Meetings. The sitting fee for attending meetings of the Board and Committees thereof has been enhanced from Rs.15,000/- to Rs.20,000/- w.e.f. 11.06.2013.

7. Disclosures:

The details of the Related Party Disclosure are included in notes forming part of the Accounts as per Accounting Standard- 18 issued by the Institute of Chartered Accountants of India. The Company has been particular in adhering to the provisions of the laws and guidelines of regulatory authorities.

8. General Body Meeting

The date, time and location of any Annual General Meeting is an internal matter decided upon in accordance with the Company's Act and Articles of the Company.

9. Shareholders Information:

NEEPCO is a Wholly Owned Government of India Enterprise and the President of India and its nominees hold 100% (Hundred Percent) equity shares of the Company. Therefore, no pattern of distribution of shareholdings is given.