29 Apr 2017 | Livemint.com

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ABC Gas (International) Ltd.

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ABC Gas (International) Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

Company's philosophy on Code of Governance:-

Your Company's philosophy on the Code of Governance envisages the enhancement of the long term economic value of the company, its shareholders and all its stakeholders by adopting better corporate practices with highest levels of transparency, accountability and equity in all phases of its operations.

I. BOARD OF DIRECTORS

• Composition

Board of Director: The Board is entrusted with the ultimate responsibility of the management, directions and performance of the Company. As its primary role is fiduciary in nature, the Board provides leadership, strategic guidance, objective and independent view to the Company's management while discharging its responsibilities, thus ensuring that the management adheres to ethics, transparency and disclosure.

The Board of your company at present consists of 7 directors. Your company has an optimum combination of Executive and Non-Executive directors with not less than fifty percent of the Board of Directors comprising of Non-Executive and independent directors. Such Non-Executive directors are independent directors except Mrs. Neelam Shorewala.

Board Meetings

Seven Board Meetings were held during the year under review and the gap between two meetings did not exceed 120 days.

II. AUDIT COMMITTEE:

The Audit Committee acts as a link among the Management, the Statutory Auditors, Internal Auditors and the Board of Directors to oversee the financial reporting process of the Company. The Committee's purpose is to oversee the quality and integrity of accounting, auditing and financial reporting process including review of the internal audit reports and action taken report.

• Composition

The Committee's composition meets with requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Chairman of the audit Committee is a Non-executive and Independent Director. The present composition of the Audit Committee and particulars of meetings attended by them are given below:

Board Meetings

Seven Board Meetings were held during the year under review and the gap between two meetings did not exceed 120 days.

II. AUDIT COMMITTEE:

The Audit Committee acts as a link among the Management, the Statutory Auditors, Internal Auditors and the Board of Directors to oversee the financial reporting process of the Company. The Committee's purpose is to oversee the quality and integrity of accounting, auditing and financial reporting process including review of the internal audit reports and action taken report.

• Composition

The Committee's composition meets with requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Chairman of the audit Committee is a Non-executive and Independent Director.

During the Financial Year 2014-15, 4 Meetings were held on 30th May, 2014; 11th August, 2014, 12th November, 2014 and 12th February, 2015.

" Terms of reference:

The terms of reference of the Audit Committee are wide enough to cover the matters specified for Audit Committee under Clause 49 of the Listing Agreements as well as in Section 177 of the

Companies Act, 2013. The terms of reference of the Audit Committee are broadly as under:

1. 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;

2. Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors;

4. Reviewing with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to:

a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013.

b) Changes, if any, in accounting policies and practices and reasons for the same.

c) Major accounting entries involving estimates based on the exercise of judgment by the management.

d) Significant adjustments made in the financial statements arising out of audit findings.

e) Compliance with listing and other legal requirements relating to financial statements.

f) Disclosure of any related party transactions.

g) Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;

6. 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 utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter

7. Review and monitor theAuditor's independence and performance, and effectiveness of audit process;

8. Approval or any subsequent modification of transactions of the Company with related parties;

9. Scrutiny of inter-corporate loans and investments;

10. Valuation of undertakings or assets of the Company, wherever it is necessary;

11. Evaluation of internal financial controls and risk management systems;

12. Reviewing, with the management, the performance of statutory and internal auditors, adequacy of the internal control systems;

13. 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;

14. Discussion with internal auditors of any significant findings and follow up there on;

15. 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;

16. 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;

17. To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

18. To review the functioning of the Whistle Blower mechanism;

19. 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 and background, etc. of the candidate;

20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

21. Reviewing financial statements, in particular the investments made by the Company's unlisted subsidiaries

• Review of Information by Audit Committee:

1. The Management discussion and analysis of financial condition and results of operations.

2. Statement of significant related party transactions submitted by management.

3. Management letters / letters of internal control weaknesses issued by the Statutory Auditors.

4. Internal audit reports relating to internal control weaknesses and

5. The appointment, removal and terms of remuneration of the Chief internal auditor.

III. NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors of the Company in its meeting held on 30th May, 2014, changed the nomenclature of the "Remuneration Committee" of Board of Directors of the Company to "Nomination and Remuneration Committee" and also modified its terms of reference to comply with the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The constitution and terms of reference of Nomination and Remuneration Committee of the Company are in compliance with provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

" Composition:

During the financial year 2014-15, two meeting of the Nomination and Remuneration Committee was held on 30th September, 2014 and 30th March, 2015 respectively.

• Term of Reference :

The broad terms of reference of Remuneration Committee are as under:

(a) Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

(b) Formulation of criteria for evaluation of Independent Directors and the Board;

(c) Devising a policy on Board diversity;

(d) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance.

(e) To carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification, as may be applicable.

(f) To perform such other functions as may be necessary or appropriate for the performance of its duties.

• Remuneration Policy:

Remuneration to Non-Executive Directors:

The Board of Directors is not paying any remuneration or sitting fees to the Non-executive directors of the Company.

Executives Directors are also not being paid sitting fees for attending meetings of the Board of Directors/Committees.

There were no material pecuniary relationships or transactions by the Company with the Non-Executive and Independent Directors of the Company.

Remuneration to Executive Directors:

The Company pays remuneration to its Executive Directors by way of salary, perquisites and allowances (a fixed component) and commission (a variable component) in accordance with provision of the Schedule V read with other provisions of the Companies Act, 2013, as approved by the Members.

The Board on the recommendation of the Nomination and Remuneration Committee approves the annual increments. The Board fixes a ceiling on perquisites and allowances as a percentage of salary. Within the prescribed ceiling, the perquisite package is recommended by the Nomination and Remuneration Committee.

Commission is calculated with reference to the net profits of the Company in a particular financial year and is determined by the Board of Directors at the end of the financial year based on the recommendations of the Nomination and Remuneration Committee, subject to the overall ceiling as stipulated in Section 197 of the Companies Act, 2013.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees.

The performance evaluation of the Chairman and Managing Director and the Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

• Remuneration Policy: ESOP Scheme:

No Stock Options were granted or exercised by any Employee of the Company during the year 2014-15. The Executive and Non-Executive Directors of the Company have not been granted any stock options in terms of the provisions under the SEBI Guidelines/Regulations.

Service contract, severance fees and notice period:

The appointment of the Managing Directors is governed by the Articles of Association of the Company and the Resolution passed by the Board of Directors and the Shareholders of the Company.

No separate Service Contract is entered into by the Company with the Managing Directors.

IV. STAKEHOLDERS' RELATIONSHIP COMMITTEE:

The Board of Directors of the Company in its meeting held on 30th May, 2014 changed the nomenclature of "Shareholders'/ Investors' Grievances Committee" to "Stakeholders' Relationship Committee" and also modified its terms of reference to comply with the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The constitution and terms of reference of Stakeholders' Relationship Committee of the Company are in compliance with provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement.

• Terms of Reference:

(a) Oversee and review all matters connected with the transfer of the Company's securities.

(b) Monitor redressal of investors' / shareholders' / security holders' grievances.

(c) Oversee the performance of the Company's Registrar and Transfer Agents.

(d) Recommend methods to upgrade the standard of services to investors.

(e) Carry out any other function as is referred by the Board from time to time or enforced by any statutory notification / amendment or modification as may be applicable.

During the year 2014-15, four meetings of "Stakeholders' Relationship Committee" were held on 30th May, 2014, 11th August, 2014, 12th November, 2014 and 12th February, 2015 respectively.

(ii) Investors' Grievance Redressal Cell:

The Company has designated Mr. Satish Shorewala, Managing Director as the compliance officer of the investors' grievance redressal cell. For the purpose of registering complaints by investors, the Company has designated an e-mail ID -swati@abcgas.co.in

VI. SUBSIDIARY COMPANIES:

The Company has no material non - listed Indian subsidiary Company.

VII. OTHER DISCLOSURES:

Disclosure on materially significant related party transactions:

No transactions of material nature has been entered into by your Company with any related parties as per Accounting Standard that may have any potential conflict with the interests of your Company. The related party transactions have been disclosed under Note No. 26 forming part of the financial statements. The Audit Committee reviewed the related party transactions undertaken by the Company in the ordinary course of business.

• Details of non-compliance by the Company:

There were no instances of non-compliance by the Company on any matters relate to various capital markets or penalties imposed on the Company by the Stock Exchange or SEBI or any statutory authority during the last 3 financial years.

• Code of Conduct:

The Company has formulated and implemented a Code of Conduct for Board Members and Senior Management Personnel of the Company which is also posted on the website of the Company. Requisite annual affirmations of compliance with the respective Codes have been made by the Directors and Senior Management of the Company.

• CEO and CFO Certification

The Managing Director of the Company give annual certification on financial reporting and internal controls to the Board in terms of Clause 49 of the Listing Agreement. The Managing Director also give quarterly certification on financial results while placing the financial results before the Board in terms of Clause 41 of the Listing Agreement.

• Whistle Blower Policy:

The Company has adopted a Whistle Blower Policy and has established the necessary mechanism in line with the requirements under the Companies Act, 2013 and Listing Agreement:

i For employees to report concerns about unethical behavior;

ii To establish a mechanism to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the Integrity Policy; and

iii To ensure that adequate safeguards shall be provided to the whistle blowers against any victimization or vindictive practices like retaliation, threat or any adverse (direct or indirect) action on their employment and direct access to the Chairperson of the Audit Committee in exceptional cases. The Policy also ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.

No personnel/ person has been denied access to the Audit Committee.

• Others:

The Company has a comprehensive and integrated risk management framework to effectively deal with uncertainty and associated risks and enhances the organisation's capacity to build value. The Risk Management framework of the Company has been designed with an objective to develop a risk culture that encourages identifying risks and responding to them with appropriate actions.

VIII. MEANS OF COMMUNICATION:

(i) Financial Results: The annual, half yearly and quarterly results are published in English newspaper Finance Express and in vernacular newspaper (Marathi) Apala Mahanagar.

(ii) All quarterly results are also posted on our website - www.abcgasinternational.com  

(iii) The Company's website www.abcgasinternational.com contains a separate dedicated Section Investor Relation where shareholder information is available. The Annual Report of the Company is also available on the website in a user-friendly and downloadable form.

(v) No Press Releases were made by the Company during the period under review.

(v) No Corporate presentations were made to institutional investors or to analysts during the period under review.

IX. GENERAL SHAREHOLDERS INFORMATION :

• 35th Annual General Meeting

Day, Date and Time

Wednesday, 30th September, 2015 at 4.00 P.M.

Venue

1, Mahesh Villa, B. G. Kher Road, Worli, Mumbai -400 018

Book Closure

Tuesday, 29th September, 2015 to Wednesday, 30th September, 2015 ( both days inclusive)

Dividend Payment Date

No dividend is declared

• Financial Calendar

The Company follows the period of 1st April to 31st March, as the Financial Year. For the Financial year 2015-16, Financial Results will be announced as per the following tentative schedule:

Reporting of Un audited In respect of financial year 2015-2016

Results for the quarter ending June 30, 2015 Last week of July 2015(tentative)

Results for the quarter ending September 30 2015 Last week of October 2015 (tentative)

Results for the quarter ending December 31, 2015 Last week of January 2016 (tentative)

Results for the quarter ending March 31, 2016 Last week of May 2016(tentative)

Annual General Meeting for financial year On or before 30th September, 2016

Listing on Stock Exchanges:

Stock Exchanges /Type of Instruments/ Stock Code F.Y.

BOMBAYSTOCK EXCHANGE

Address

25th Floor, P.J. Tower, Dalal Street, Fort, Mumbai-400001

Stock Code / ID

513119 / ABCGAS

• Listing on CDSL

The Company has entered an agreement with Central Depository Services (India) Limited (CDSL) and the ISIN No. INE 173M01012 has been by shareholders have an option to dematerialize their shares

• Registrar and Transfer Agents

Share transfers, dividend payment and all other investor related matters are attended to and processed by our Registrar and Share Transfer Agent viz. M/s. M/S Sharex Dynamics (India) Pvt. Ltd.,

M/S Sharex Dynamics (India) Pvt. Ltd.,

Unit No. 1, Luthra Ind. Premises, Andheri Kurla Road, Safed Pool, Andheri East, Mumbai - 400072

Phone No. 022-28515606 /28515644 Email ID: sharexindia@vsnl.com

• Share Transfer System

Share transfer requests received in physical form are registered within 15 days from the date of receipt, subject to documents being valid and complete in all respect and Demat requests are normally confirmed within an average of 10 days from the date of receipt.

• Reconciliation of Share Capital Audit:

A qualified practicing Company Secretary carried out reconciliation of share capital audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and the Central Depository Services (India) Ltd (CDSL) and the total issued and listed capital. The reconciliation of share capital audit report mentions 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 & CDSL, as depositories.

Registered Office:-

1, Mahesh Villa, B. G. Kher Road, Worli, Mumbai - 400018

Investor Correspondence for transfer, Complaints & information etc:-

1, Mahesh Villa, B. G. Kher Road, Worli, Mumbai - 400018

Email: pipedgas@gmail.com