REPORT ON CORPORA TE GO VERNANCE
"Good corporate governance is about intellectual honesty' and not just sticking to rules and regulations, capital flowed towards companies that practiced this type of good governance."
- Mervyn King (Chairman King Report)
Your Company's philosophy on Corporate Governance over the years lays increasing emphasis on fairness, transparency and integrity of the management, thereby inspiring and strengthening investor confidence and their commitment to the Company. Avance believes in creating wealth for all its stakeholders. In pursuit of this objective, the Policies of the Company are designed to strengthen the ability of the Board of Directors to supervise the management and to enhance long-term stakeholder value. At Avance, corporate governance has transformed into corporate integrity and accountability. The Company, through its Board and Committees, endeavors to strike and deliver the highest governing standards to meet the aspirations of every stakeholder.
Board of Directors:
A concrete principle of corporate governance is a key to maintaining the trust of investors. The Board of Directors of the Company has adopted these corporate governance practices to promote the effective functioning of the Board, its committees and the Company. The Board of Directors along with its Committees provide leadership and guidance to the Company's management as also direct, supervise and control the performance of the Company.
The Company has built an effective Board by bringing together the right combination of individuals with diversified skill and experience and by promoting the right dynamic among these individuals. The Board currently comprises of six Directors out of which three (i.e. 50%) are Non-Executive Directors. The Company has thee Executive Chairman and the three Independent Directors comprise half of the total strength of the Board. All the Independent Directors have confirmed that they meet the 'independence' criteria as mentioned under the Clause 49 of the Listing Agreement and Section 149 of the Act. The composition of Board of Directors as on March 31, 2015 is given below:
Committees of the Board of Directors
The Board of Directors of the Company is the top most authority constituted by shareholders for overseeing the Company's overall functioning. The Board of Directors of the Company has constituted various committees like Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and Risk Management Committee to evaluate the Company's strategic direction, management policies and their effectiveness, and ensures that shareholders' long term interests are being served.
Audit Committee :
1) Brief Description of Terms of Reference.
The primary objective of the committee is to monitor and provide effective supervision of the Management's financial reporting process to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. The committee oversees the work carried out in the financial reporting process by the Management, the internal auditors and the independent auditor, and notes the processes and the safeguards employed by each. The committee has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent auditor in accordance with the law. All possible measures must be taken by the committee to ensure the objectivity and independence of the independent auditor
Powers of Audit Committee:
The Audit Committee shall have powers, which should include the following:
1. To investigate any activity within its terms of reference.
2. To seek information from any employee.
3. To obtain outside legal or other professional advice.
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of Audit Committee
The role of the Audit Committee shall include the following:
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 Director's 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 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 the auditor'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, 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 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.
Nomination and Remuneration Committee: Terms of reference:
Your Company's policy on the appointment and remuneration of directors and key managerial personnel provides a framework based on which our human resources management aligns their recruitment plans for the strategic growth of the Company. Pursuant to section 178(4) of the Companies Act, 2013 and Clause 49(IV) (B) (4) of the Listing Agreement, the nomination and remuneration committee is constituted to ensure that:
a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:
Role of Nomination and Remuneration Committee
I. Formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy relating to the remuneration of Directors, KMP and other employees. II. Formulation of criteria for evaluation of Independent Director and the Board
III. Devising a policy on Board diversity.
IV. Identify persons who are qualified to become Director and persons who may be appointed in KMP and SMP positions in accordance with the criteria laid down in this policy.
V. Recommend to the Board, appointment and removal of Director, KMP and SMP.
One meeting during the year 2014-2015 was held i.e on 24th August, 2014. Remuneration Policy.
A Nomination and Remuneration Policy was reviewed and approved by the Committee and annexed to Board Report as "Annexure 4".
C) Stakeholders Relationship Committee: Terms of Reference
Your Board of Directors has constituted Stakeholders and Relationship Committee to specifically look into the shareholders' and investors' redressed of complaints on matters relating to:
> Transfer of shares,
> Non-receipt of annual report,
> Non-receipt of new share certificate,
> Non-receipt of dividend,
> Payment of unclaimed dividends, etc.
In addition, the Committee also looked into matters that can facilitate better investor services and relations, to look into matters that can facilitate better security-holders services and relations
In compliance with the provisions of section 178 of Companies Act, 2013 and new clause 49 of the Listing Agreement, the Board re-named the Committee as 'Stakeholders Relationship Committee'.
Composition and Meetings
During the year 2014-2015, the Committee met following five times:
> 12th May, 2014;
> 25th July, 2014;
> 20th August, 2014;
> 28th October, 2014; &
> 3rd February, 2015.
D) Risk Management Committee
During the year, adhering the requirement of Listing agreements and Companies Act, 2013, your Board of Directors have constituted a Risk Management Committee on 22nd October, 2014, which has been entrusted with the responsibility to assist the Board in: (a) monitoring and reviewing of the risk management plan; and (b) Overseeing that all the risks that the organization faces such as strategic, operational, financial, credit, market, liquidity, security, property, legal, regulatory and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Risk Management Policy was reviewed and approved by the Committee.
Role and Objective of the Committee includes followings:
1. Providing a framework that enables future activities to take place in a consistent and controlled manner.
2. Improving decision making, planning and prioritization by comprehensive and structured understanding of business activities, volatility and opportunities/ threats.
3. Contributing towards more efficient use/ allocation of the resources within the organization.
4. Protecting and enhancing assets and company image.
5. Reducing volatility in various areas of the business.
6. Developing and supporting people and knowledge base of the organization.
7. Optimizing operational efficiency
One meeting during the year 2014-2015 was held i.e on 24th January, 2015. E) Meeting of Independent Director.
During the financial year 2014-15, board of directors of the company adhering to Clause 49 II (B) (6) of the Listing Agreement hold a separate meeting of the Independent directors. The meeting attended by following Independent directors of the Company:
Mr. Anand Chaudhary : Chairman
Ms. Pooja Srivastava : Member
Mr. Bimal Kamdar : Member
The meeting of Independent Directors held on 9th March, 2015 to transact following agenda:
> To review the performance of Non-Independent Director and Board as whole.
> To review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors.
> To assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Annual General Meeting
Date : 28th September, 2015
Time : 9.30 a.m.
Place : D-603, 6th Floor, Crystal Plaza Premises Co-operative Society Limited, Opp. Infinity Mall, New Link Road, Andheri (West), Mumbai- 400053.
Corporate Identification Number (CIN) : L51900MH1985PLC035210
Adoption of Quarterly Financial Results for the Quarter ending : Tentative date of the Meeting of the Board of Directors
June 30,2015 : 11.08.2015
September 30, 2015 : On or before 14.11.2015
December 31, 2015 : On or before 14.02.2016
March 31, 2016 : On or before 15th May, 2016 or 30th May, 2016.
Book Closure Dates : From, 22nd September. 2015 to 28th September. 2015 (both days inclusive).
Listing on Stock Exchange
The BSE Ltd. (Bombay Stock Exchange)
Add:-Phiroze JeeJeeBhoy Towers, Dalal Street,Mumbai- 400001.
Scrip Code and ISIN
Scrip Code: 512149
ISIN No for Dematerialization of Shares: INE758A01049
Payment of Listing Fees
The Listing Fees for Financial Year 2015-2016 has already been paid to the Stock Exchanges.
Dematerialization of Shares and liquidity
The Company's Equity Shares are admitted with the Depository System of National Security Depository Limited (NSDL) and Central Depository (India) Limited (CDSL), as an eligible Security under the Depository Act, 1956 as such, facilities for dematerialization of the Company's Equity. Shares are available vide ISIN No.: INE758A01049 at both the Depositories
Compliance officer of the Company
Mr. Srikrishna Bhamidipati
Registrar and Share Transfer Agent
Purva Sharegistry India Private Limited Add:-Unit No. 9, Shiv Shakti Industrial Estate, Ground Floor, J. R. Boricha Marg, Opp. Kasturba Hospital, Lower Parel, Mumbai- 400011
Avance Technologies Limited D-603, Crystal Plaza Premises Co-Operative Society Limited, Opp. Infinity Mall, Link Road, Andheri (West), Mumbai- 400053. Telephone No.: 022-65652123 Email Address: email@example.com firstname.lastname@example.org
Share Transfer System
Share transfers are processed and share certificates duly endorsed are delivered within an average period of fifteen days from the date of receipt, subject to documents being valid and complete in all respects. The Board has delegated the authority for approving transfer, transmission, etc. of the Company's securities to the Managing Director of the Company, A summary of transfer/transmission of securities of the Company so approved by the Managing Director is placed at every Stakeholder's Relationship Committee.
As required by clause 47 (c) of the Listing Agreements entered into by the Company with the Stock Exchanges, a certificate is obtained every six months from a Practicing Company Secretary with regard to, inter alia, effecting transfer, transmission, sub-division, consolidation, renewal and exchange of equity shares within fifteen days of their lodgment. The certificate is also forwarded to BSE where the equity shares of the Company are listed.
Means of Communication
The Board of Directors of the Company approves and takes on record the quarterly, half yearly and annual results and announces forthwith results to all the Stock Exchanges, where the shares are listed. The results are published normally in Free Press Journal and Navshakti.
The results are also displayed on the Company's website at www.avance.in and also uploaded on the website of the Bombay Stock Exchange Ltd.
All information and matters which are material and relevant to shareholders are intimated to the BSE Limited, where the securities of the Company are listed.
Outstanding GDRs/ADRs/Warrants or any convertible Instruments
As of date the Company has not issued these types of securities.
Reconciliation of Share Capital Audit Report
As required under Regulation 55A of SEBI (Depositories and Participants), Regulations, 1996, the Reconciliation of Share Capital on the total admitted capital with National Securities Depository Limited ("NSDL") and Central Depository Services (India) Ltd. ("CDSL") and in physical form for each of the quarters in the financial year ended 31 March, 2015 was carried out by a Practicing Company Secretary whose reports were submitted with the Stock Exchanges at the end of every quarter. The reports were also placed periodically before the Board of Directors at its Board Meetings.
For Avance Technologies Limited
Sd/- Srikrishna Bhamidipati
Date: 4th September, 2015