CORPORATE GOVERNANCE REPORT
The Company believes that sound corporate governance is a key element for enhancing and retaining the trust of investors and various other stakeholders. As a responsible corporate citizen your Company has evolved best practices which are structured to institutionalize policies and procedures that enhance the efficacy of the Board and inculcate a culture of accountability, transparency and integrity across the Arihant group as a whole.
BOARD OF DIRECTORS
Board Composition and Category of Directors:
The current policy of the Company is to have an optimum combination of Executive and Independent directors to maintain the independence of the Board. As on 31st March, 2015, the Board consists of seven members, three of whom are executive or whole-time directors and four are independent directors.
Code of Conduct:
The Board of Directors have approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company.
The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.
A copy of the Code has been put on the Company's website (www.asl.net.in). A declaration signed by the Company's Chairman and Managing Director is published in this report.
Number of Board Meetings:
Six Board Meetings were held during the year. These were held on 28th April, 2014; 5th August, 2014; 10th November, 2014; 22nd December, 2014; 24th January, 2015 and 30th March, 2015.
# The Directorship held by Directors as mentioned above excluding subsidiaries of ASL, private companies and foreign companies.
##In accordance with Clause 49 of the Listing Agreement Chairmanship/Membership of only Audit Committee and Stakeholders' Relationship Committees in all public companies (excluding Arihant Superstructures Limited) have been considered.
Meeting of Independent Directors
During the year under review, the Independent Directors met on 30th March, 2015, inter alia, to:
1. Review the performance of Non Independent Directors and the Board of Directors as a whole.
2. Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non Executive Directors.
3. Access the quality, quantity and timeliness of flow of information between the company management and the Board. All the independent Directors were present at the meeting*.
*Ms Kamini Shroff was appointed as an Independent Director w.e.f. 30th March, 2015 in the Board Meeting held after the Meeting of the Independent Directors.
Declaration of Independence by the Independent Directors:
The Independent Directors have provided their declaration of Independence as per the provisions of Section 149(7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
COMMITTEES OF THE BOARD
Terms of Reference:
The Audit Committee is entrusted with the responsibility to supervise the Company's financial control and reporting process and inter-alia perform the following functions:
1. Overseeing financial reporting process and disclosure of financial information, to ensure that the financial statements are correct, sufficient and credible;
2. Recommending appointment and removal of the statutory auditors, fixation of audit fee and approval for payment of any other services;
3. Reviewing with the management, the periodical financial statements including of subsidiaries/ associates, in particular the investments made by the unlisted subsidiaries of the Company, before submission to the Board for approval;
4. Reviewing with the management and the statutory and internal auditors, the adequacy of internal control systems and recommending improvements to the management;
5. Reviewing the adequacy of internal audit function, approving internal audit plans and efficacy of the functions including the structure of the internal audit department, staffing, reporting structure, coverage and frequency of internal audit;
6. Discussion with internal auditor on any significant findings and follow-up thereon;
7. Reviewing the findings of any internal investigations by internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board;
8. Discussion with statutory auditors before the audit commences, about the nature and scope of audit, as well as post-audit discussions to ascertain any area of concern;
9. Reviewing the management discussion and analysis of financial condition and results of operations, statement of significant related party transactions, management letters/letter of internal control weakness issued by statutory auditors, internal audit reports etc.;
10. Reviewing the Company's financial and risk management policies;
11. Reviewing the uses/applications of funds raised through public offerings; and
12. To perform such other function(s) as may be delegated by the Board from time to time.
Composition, Meetings and Attendance
The Audit Committee of the Company meets the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing agreement. The Audit Committee consists of three Independent Directors and one whole-time Director. The Company Secretary acts as the Secretary for the Audit Committee.
Terms of Reference
1. The Committee looks into the redressal of Shareholders'/Investors' complaints/ grievances pertaining to transfer or credit of shares, non-receipt of annual reports, dividend payments and other miscellaneous complaints/grievances.
2. The Committee reviews performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services.
The Company Secretary is the Compliance Officer for complying with the requirements of SEBI Regulations and the Listing Agreement with Stock Exchanges
Redressal of Investor Grievances
The Company's policy is to address all complaints, suggestions and grievances expeditiously and to send/issue replies at earliest except in case of dispute over facts or other legal impediments.
During the year under review, no investors' complaints were received.
Nomination & Remuneration Committee
(Formerly Remuneration Committee)
Composition, Meeting and Attendance of the Committee:
The Committee comprises of three Independent Non-Executive Directors. Mr. V.V. Nalavde, Independent Non-Executive Director, acts the Chairman of the Committee. The other members of the Committee are Mr. Virendra Mital and Mr. Dinesh Chandra Babel, Independent Directors.-The Company Secretary acts as the Secretary for the Nomination & Remuneration Committee.-
The Company's Remuneration Policy of the Company for Directors, Key Managerial Personnel and other employees is primarily based on the following criteria:
• Performance of the Company;
• Success, potential and performance of individual managers; and
• External competitive environment.
The Company's remuneration policy is based on four tenets: pay for responsibility, performance, potential and growth. Individual performance pay is determined by business performance of the business unit and the group as a whole clubbed with performance of individuals measured through the annual appraisal process.
The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) to its Executive Directors based on the recommendations of the Nomination and Remuneration Committee as per remuneration policy of the Company, within the ceilings fixed by the shareholders. The sitting fees paid to the Independent Directors is Rs. 20,000/- per Board Meeting and Rs. 5,000/- per Committee Meeting attended.
Terms of Reference
1. Determining Remuneration Policy of the Company;
2. Recommending remuneration including periodic revision, performance bonus, incentives, commission, stock options, other services, perquisites and benefits payable to the Managing, Whole-time and other Director(s) and Key Managerial Personnel of the Company including their relatives;
3. Framing policies and fixation of compensation including salaries, incentives, bonuses, promotions, benefits, stock options and performance targets for executives of the Company; and
4. Formulation of the detailed terms and conditions of stock options, granting of administration and superintendence thereof.
5. Ensuring due compliance with the provisions pertaining to the Managerial Remuneration and Remuneration to the Board of Directors, as per the provisions of the Companies Act, 1956.
Share Transfer Committee
Composition, Meeting and Attendance of the Committee:
The Committee comprises of Ashok Chhajer, Nimish Shah and Dinkar Samant.-The Company Secretary acts as the Secretary for the Share Transfer Committee.-
During the year under review, no meeting of Share Transfer Committee was held.
Terms of Reference
The Committee oversees and reviews all matters connected with transfer of physical securities and also interalia approves issue of duplicate, split of share certificates, etc.
Corporate Social Responsibility Committee
Composition, Meeting and Attendance of the Committee:
The Corporate Social Responsibility Committee of the Company meets the requirements of Section 135 of the Companies Act, 2013. The Corporate Social Responsibility Committee consists of two Independent Directors and two whole-time Directors. The Company Secretary acts as the Secretary for the Corporate Social Responsibility Committee.
• To monitor and devise a framework for the CSR activities to be undertaken by the Company
• To review the CSR Activities on a regular basis and to guide the CSR team on such projects, as may be required
Risk Management Committee
The Risk Management Committee of the Company consists of three members and is formulated as per the requirements of the Clause 49 of the Listing Agreement, as is effective from 1st October, 2014. The majority of the members of the Risk Committee are Directors The members of the Risk Management Committee have been appointed on the recommendations of the Nomination and Remuneration Committee.
One Disinvestment Committee Meeting was held during the year on 24th January, 2015
The terms of reference of the Risk Management Committee are as follows:
• To periodically assess risks to the effective execution of business strategy and review key leading indicators in this regard
• The committee shall annually review and approve the Risk Management Framework of the Company
• To evaluate significant risk exposures of the Company and assess management's actions to mitigate the exposures in a timely manner
• The risk management committee shall have access to any internal information necessary to fulfill its oversight role.
• The risk management committee shall also have authority to obtain advice and assistance from internal or external legal, accounting or other advisors
The Executive Committee of the Company consists of three members namely Mr. Ashok Chhajer (Chairman), Mr. Nimish Shah and Mr. Dinkar Samant. No meeting of Executive Committee was held during the year.
During the financial year, there was no pecuniary relationship or transaction between the Company and its Non-Executive Directors. The Company has not granted any stock options to any of its Non-Executive Directors. The Directors are not liable to any commission, options or any other benefits over and above the remuneration as stated above, which is fixed and not performance linked compensation.
The contract entered into between the Company and the Managing Directors and the Whole-time Executive Directors are as per the terms of the resolution approved by the Shareholders, respectively
SUBSIDIARY MONITORING FRAMEWORK
The subsidiaries of the Company are as follows:
1. Arihant Abode Limited
2. Arihant Vatika Realty Private Limited
3. Adeshwar Realty Private Limited
4. Arihant Gruhnirman Private Limited
5. Arihant Aashiyana Private Limited
6. Arihant Technoinfra Private Limited (till 17th February, 2015)
The subsidiaries are managed by their respective Boards having rights and obligations to manage such companies in the best interest of their stakeholders. As a majority shareholder, the Company monitors and reviews the performance of such companies' inter-alia, by the following means:
a) Financial Statements, in particular, the investments made by the unlisted subsidiary companies, have been reviewed periodically by the Audit Committee;
b) Minutes of the meetings of the unlisted subsidiary companies are placed before the Company's Board, periodically;
c) An Independent Director of the Company is also a Director on the Board of each of the subsidiary companies.
c) Statements containing significant transactions and arrangements entered into by the unlisted subsidiary companies are periodically placed before the Board of Directors; and
d) None of the unlisted company is material subsidiary in terms of Clause 49 of the Listing Agreement
In last AGM following resolutions were passed through E-voting:
1 Adoption of Balance Sheet as at 31st March, 2014 and Profit and Loss Account for the year ended on that date and the Reports of Board of Directors and Auditors thereon
2 Declaration of Dividend on Equity Shares
3 Appointment of Director in place of Mr. Nimish Shah (DIN: 03036904), who retires by rotation and being eligible, offers himself for re-appointment.
4 Appointment of Auditors and fix their remuneration
5 Appointment of Mr. Virendra Mital (DIN 00376830),as the Independent Director of the Company
6 Appointment of Mr. Dinesh Chandra Babel (DIN 03042254) as the Independent Director of the Company
7 Appointment of Mr. Vinayak Vaman Nalavde (DIN 02047436) as the Independent Director of the Company
8 Increase in the Remuneration of Mr. Dinkar Samant (DIN: 00023459), Whole Time Executive Director
9 Increase in the Remuneration of Mr. Nimish Shah (DIN:03036904), Whole Time Executive Director
10 Approval of Remuneration to be paid to Cost Accountant, Mr. Vinod Subramanium, Chartered Accountant for the financial year 2014-2015
Extraordinary General Meeting:
No Extraordinary General Meeting of the Members was held during the year 2014-2015
No Postal Ballot was conducted during the year 2014-2015
Related Party Transactions
None of the transactions with any of the related parties were in conflict with the interest of the Company. Details of transactions with related parties are disclosed in notes to the Accounts in the Annual Report. All related party transactions are negotiated at arms' length basis and are only intended to further the interest of the Company.
The Company has complied with applicable rules and regulations prescribed by Stock Exchanges, SEBI or any other statutory authority relating to the capital markets. All returns/Reports were filed within stipulated time with Stock Exchanges/ other authorities.
The Company has established a vigil mechanism:
(i) to promote ethical behaviour in all its business activities
(ii) to establish mechanism for employees to report any genuine grievances, illegal, unethical behaviour, suspected fraud or violation of laws, rules and regulation or conduct
The reportable matters are disclosed to the Audit Committee of the Board of Directors.
The Policy also provides for adequate protection to the whistle blower against victimization or discriminatory practices.
MEANS OF COMMUNICATION
The Company regularly intimates information like quarterly financial results and media releases on significant developments in the Company.
The financial results are normally published in Free Press Journal (English) and Navshakti (Marathi). Also they are uploaded on the Company's website www.asl.net.in
Website and Exclusive Designated e-mail id
The Company's website www.asl.net.in has a separate dedicated section namely "Investors" where all the information relating to shareholders are available (including the Annual Report) and to enable investors to register their queries and/or grievances, the Company has dedicated an exclusive e-mail email@example.com . All investors are requested to avail this facility.
GENERAL SHAREHOLDERS' INFORMATION
Annual General Meeting
Day : Friday
Date : 25th September, 2015
Time : 11:00 am
Venue : Hotel The Regenza by Tunga, Plot No. 37, Sector 30A, Vashi, Navi Mumbai - 400703
Financial Calendar (Tentative)
Financial Year 1st April, 2015 to 31st March, 2016
Adoption of Quarterly Results by last week of the month of the quarter ended
Quarter ended Latest by
30th June, 2015 : 14th August, 2015
30th September, 2015 : 14th November, 2015
31st December, 2015 : 13th February, 2016
31st March, 2016 : 30th May, 2016
b) Book Closure Dates
From 19th September, 2015 to 25th September, 2015 (both days inclusive)
c) Dividend Payment Date
Dividend will be paid within 30 days of the approval of the same in the Annual General Meeting.
d) Liquidity of Shares
The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE), P J. Tower, Dalal Street, Mumbai - 400 001. The shares of the Company are currently traded under the B group. The Company has paid the listing fees to BSE for 2014-15.
f) (i) ISIN Demat No. : INE643K0I0I8
(ii) Stock Code : Bombay Stock Exchange (BSE) - 506194
g) Corporate Identification Number (CIN): L5I900MHI983PLC029643
h) Registrar and Share Transfer Agent (RTA) Adroit Corporate Services Pvt Ltd
I9/20, Jaferbhoy Industrial Estate, Ist Floor, Makwana Road, Marol Naka, Mumbai 400059
i) Share Transfer Mechanism
The share transfers received in physical form are processed through Registrar and Share Transfer Agent (RTA), within seven days from the date of receipt, subject to the documents being valid and complete in all respects. The share certificates duly endorsed are returned immediately to the shareholders by RTA. The details of transfers/transmission so approved, is placed before the Share Transfer Committee for its confirmation. Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchanges, Certificate on half-yearly basis confirming due compliance of share transfer formalities by the Company, certificates for timely dematerialization of the shares as per SEBI (Depositories and Participants) Regulations, I996 and a Secretarial Audit Report on Reconciliation of the Share Capital of the Company obtained from a Practicing Company Secretary have been submitted to The Bombay stock exchange within stipulated time.
k) Dematerialization of Shares
The shares of the Company are in compulsory dematerialized segment and are available for trading in depository system of both National Securities Depository Limited and Central Depository Services (India) Limited. As on 3Ist March, 20I5, 4II07599 Equity Shares (constituting 99.87 %) were in dematerialized form.
l) Address for Investor Correspondence
For transfer/dematerialization of shares, payment of dividend on shares and any other queries relating to the shares.
Adroit Corporate Services Pvt Ltd,
I9/20, Jaferbhoy Industrial Estate, Ist Floor, Makwana Road, Marol Naka, Mumbai 400059 Telephone: 022-28594060/022-40052II5 Fax: 022 - 28503748 Email: firstname.lastname@example.org Website: www.adroitcorporate.com
Details of penalties imposed by Stock Exchange or SEBI:
No penalties have been imposed during the year 20I4 - 20I5.
Reconciliation of Share Capital
The Report called Reconciliation of Share Capital issued by Practicing Company Secretary, confirming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL, is placed before the Board on a quarterly basis. A copy of the Audit Report is submitted to the Stock Exchanges where the securities of the Company are listed.
Compliance Certificate from the Practicing Company Secretary
Certificate from the Practicing Company Secretary, Mr. D. A. Kamat, FCS 3843 confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is annexed to this Report forming part of the Annual Report.
Adoption of mandatory and non- mandatory requirements
The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement. The Company has adopted the following non-mandatory requirements of Clause 49 of the Listing Agreement:
The Company is in the regime of unqualified financial statements.
Reporting of Internal Auditor
The Internal Auditor directly reports to the Audit Committee.
CEO and CFO Certification
The Chairman and Managing Director and Chief Financial Officer of your Company give annual certification on financial reporting and internal controls to the Board in terms of Clause 49 of the Listing Agreement. The Chairman and Managing Director and Chief Financial Officer of your Company also give quarterly certification on financial results while placing the financial results before the Board in terms of Clause 4I of the Listing Agreement. The annual certificate given by the Chairman and Managing Director and the Chief Financial Officer is published in this report.
Certificate on Compliance with Code of Conduct
I hereby confirm that all members of the Board and Senior Management Personnel of the Company have affirmed compliance with Arihant Superstructures Limited Code of Conduct for the financial year 20I4-I5.
Chairman and Managing Director
Pace: Navi Mumbai
Date: 1st August, 2015