CORPORATE GOVERNANCE REPORT
In compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, the Company submits the report on the matters mentioned in the said Clause on Corporate Governance and due compliance report on specific areas wherever applicable for the Financial Year ended 31 March, 2015: 1. COMPANY'S PHILOSOPHY
The Company continues to believe in conduct of its high standard of integrity, ethical behavior, respect for laws, fair business and strong and effective audit controls in areas of its operations. Your Company in this pursuit lays great emphasis on transparency, accountability and compliance which guides the Company towards fulfilling consistently the high standards of Corporate Governance.
2. BOARD OF DIRECTORS
I. Composition of Board
As on 31st March, 2015, the Board consisted of Mr. Vikas Kapoor, Mr. Rakesh Kumar Bhatnagar, Mr. Ramesh Chandra Agarwal, Mr. Satish Kumar Gupta and Ms. Gunjan rd Arora. The Board is a balanced mixed of executive and non-executive directors. 1/3 of the Board Members are Independent Directors.
The Non-Executive Directors do not have any material pecuniary relationship or transaction with the Company during the year 2014-2015.
All the Independent Directors possess the requisite qualifications and are experienced in their own fields. Directors other than Whole time Director and Independent Directors are liable to retire by rotation.
II. Board Meetings, other Directorship and Attendance of Directors
A total of (7) Seven Board Meetings were held during the year i.e on 30th May 2014, 1s August 2014, 13 August 2014, 14 November 2014, 1s December 2014, 13 February 2015 and 25 March 2015.
The gap between any two Meetings never exceeded 120 days as prescribed in Clause 49 of the Listing Agreement.
None of the Directors of the Company is a member of more than ten Committees or a Chairman of more than 5 Committees across all the companies in which he is a Director. Necessary disclosures regarding Committee positions in other public companies as at 31 March, 2015 have been made by Directors.
The composition of the Board, attendance of Directors at Board meetings held during the year and the number of Directorships and Committee chairmanships /memberships held by them in other public companies as on 31 March 2015 are given herein below.
Other directorships do not include alternate directorships, directorships of private limited companies, Section 25 companies and of companies incorporated outside India. Chairmanships/Memberships of Board committees include only Audit and Stakeholders' Relationship Committees.
III. Meeting of Independent Directors
The Independent Directors of the Company had met during the year on 13 February, 2015 without the attendance of Non-Independent Directors and members of Management to review:
a)the performance of Non-Independent Directors and the Board as a whole,
b)the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors, and
c)the quality, quantity and timeliness of flow of information between the Company Management and the Board.
3. DIRECTORS REMUNERATION
Remuneration / Sitting fees paid to Director (s) during the year is given below:
During the year, Mr. Gopal Singh Negi was designated as Whole-Time Director of the Company in terms of Section 198, 269 & 309 of the Companies Act, 1956 read with Schedule XIII on no remuneration basis. However he resigned w.e.f. 13th August 2014.
II.Non-Executive Directors / Independent Directors
The Non-Executive Directors are not paid any remuneration including sitting fees for attending the meetings of the Board of Directors and committees thereof.
However the Independent Directors are paid sitting fees for attending the meetings of the Board of Directors and committees thereof.
The Company does not have any material pecuniary relationship or transactions with its Non-Executive Directors. The details of sitting fees paid and shares held by the Non-Executive Directors / Independent Directors are as under:
4. DIRECTORS SEEKING APPOINTMENT / RE-APPOINTMENT
The required information regarding the details of Directors seeking appointment or reappointment is furnished in the Notice for the Annual General Meeting as Annexure -B.
5. COMMITTEE (S) OF THE BOARD
I. Audit Committee
Audit Committee monitors and provides an effective supervision of the financial reporting process of the Company with a view to ensure accurate and timely disclosures with the highest level of transparency, integrity and quality.
The functions and scope of the Audit Committee includes review of Company's financial reporting, internal controls, related party transactions, utilization of IPO proceeds, if any, insider trading, disclosure in financial statements, management discussion and analysis, risk mitigation mechanism, appointment of statutory auditor and internal auditor and all other aspects as specified by Clause 49 of the Listing Agreement.
The Audit Committee is empowered, pursuant to its terms of reference, to:
a.Investigate any activity within its terms of reference and to seek any information it requires from any employee;
b.Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, when considered necessary.
Company's Audit Committee carries out all the functions stipulated under Clause 49 of the listing agreement.
The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews:
a.Management discussion and analysis of financial condition;
b.Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
c.Internal audit reports relating to internal control weaknesses;
d.The appointment, removal and terms of remuneration of the internal auditor and statutory auditor;
e.Whenever applicable, the uses/applications of funds raised through public issues, rights issues, preferential issues by major category (capital expenditure, sales and marketing, working capital etc.), as part of the quarterly declaration of financial results.
The Audit Committee is also apprised on information with regard to related party transactions by presenting the following:
a.A statement in summary form of transactions with related parties in the ordinary course of business;
b.Details of material individual transactions with related parties which are not in the normal course of business, if any;
c.Details of material individual transactions with related parties.
On 13 August, 2014, the Board of Directors reconstituted the composition of Audit Committee in accordance with relevant provisions of the Companies Act, 2013 and the Listing Agreement.
The Audit Committee met four times during the year i.e. on 30th May 2014, 13th August 2014, 14 November 2014 and 13 February 2015.
II. Nomination and Remuneration Committee
The Nomination and Remuneration Committee is responsible for:
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.
The criteria for the appointment of directors, KMPs and senior management are as follows:
1.The committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as director, KMP or senior management level and recommend to the Board his/ her appointment.
2.A person to be appointed as director, KMP or in senior management should possess adequate qualification, expertise and experience for the position he/she is considered for appointment to. The committee is empowered to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.
3.A person, to be appointed as director, should possess impeccable reputation for integrity, deep expertise and insights in sectors / areas relevant to the Company, ability to contribute to the Company's growth, and complementary skills in relation to the other Board members.
4.A whole-time KMP of the Company shall not hold office in more than one company except in its subsidiary company at the same time. However, a whole-time KMP can be appointed as a director in any company, with the permission of the Board of the Company.
The Committee reviews and recommends the remuneration and performance linked bonuses to Key Managerial Personnel and other employees of the Company and also evaluates their performance based on the overall performance and financial results of the Company and on the assessment of the personal contribution and achievements of the individuals.
Increments to the existing remuneration of Key Managerial Personnel and other employees of the Company are recommended by the committee to the Board.
Evaluation Criteria by the Committee:
?The Board's functioning was evaluated on various aspects, including degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board's processes, information and functioning.
The Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings.
In addition, the Chairman was also evaluated on key aspects of his role, including setting-up the strategic agenda of the Board, encouraging active engagement by all Board members.
?The areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
?In terms of Schedule IV of the Companies Act, 2013, the performance of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated.
The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole.
The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
Composition of the Nomination and Remuneration Committee:
On 13th August 2014, the Board constituted a "Nomination and Remuneration Committee" in accordance with relevant provisions of the Companies Act, 2013 and the Listing Agreement.
The Nomination and Remuneration Committee met one time i.e. on 1 December 2014 from the date of its constitution i.e. 13t August 2014 till 31st March 2015.
Mr. Satish Kumar Gupta, Chairman of Nomination and Remuneration Committee, wcjs present at the last Annual General Meeting of the Company which was held on 30 September, 2014.
III. Stakeholders Relationship Committee
The Stakeholders' Relationship Committee is responsible for:
?Redressal of Shareholders' grievances in general and relating to non-receipt of dividends, interest, non-receipt of balance sheet, approval of the share transfers, transmissions , transpositions and issue of duplicate share certificates;
?specifically look into the redressal of grievances of shareholders of the Company; and
?such other matters as may, from time to time, be required by any statutory, contractual or other regulatory requirements to be attended by such Committee.
Composition of the Stakeholders Relationship Committee:
During the period from 1st April, 2014 till 12th August, 2014 the composition of Investors' Grievance / Share Transfer Committee (now known as Stakeholders' Relationship Committee) was as follows:
On 13 August, 2014, the Board renamed the Investors' Grievance / Share Transfer Committee as "Stakeholders' Relationship Committee" and reconstituted the committee in accordance with relevant provisions of the Companies Act, 2013 and the Listing Agreement.
The details of the investors' complaint / grievance received by the Company during the Financial Year 2014-15 are mentioned below:
No. of complaints pending at the beginning of the year: NIL
No. of complaints received during the year: NIL
No. of complaints resolved during the year: NIL
No. of complaints pending as at the end of the year: NIL
Mr. Vikas Kapoor, Chairman of Stakeholders' Relationship Committee, was present at the last Annual General Meeting of the Company which was held on 30 September, 2014.
During the year under review, the Company has no subsidiary.
8.CEO / CFO CERTIFICATION
As required by Clause 49 of the Listing agreement, the certification by Manager and Director (in absence of CFO as he resigned on 27 March 2015) on the Financial statements and the Cash Flow Statements for the year ended 31 March, 2015 is enclosed as ANNEXURE - V(a)(i) at the end of this Report.
9.CODE OF CONDUCT
The Company has adopted a Code of Conduct for all Board Members of the Company.
All Board Members have affirmed compliance with the Code of Conduct as applicable to them. A declaration to this effect is enclosed as ANNEXURE - V(a)(ii) at the end of this report.
(a)Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives that may have potential conflict with the interest of the Company at large.
There are no transactions with any of the related parties.
(b)Details of non compliance by the Company, penalties and strictures imposed on the Company by Stock Exchange or SEBI or any Statutory Authority, on any matter related to capital markets, during the last three years.
No penalties, strictures were imposed on the Company by Stock Exchange or SEBI or any Statutory Authority, on any matter related to capital markets, during the last three years.
(c)Vigil Mechanism/Whistle Blower Policy
Pursuant to Section 177(9) and (10) of the Companies Act, 2013, read with Rule 7 of the Companies (Meetings of Board and its powers), Rules 2014 and Clause 49 of the Listing Agreement, the Company has established a Vigil Mechanism to report genuine concerns about actual or suspected frauds, unethical behavior etc. and the same has been posted on the official website of the Company.
(d) Compliance of Mandatory Requirement
The Company has complied with the mandatory requirements of Clause 49 of the Listing Agreement as presently applicable during the year under review. Details of non-mandatory provisions to the extent complied with have been disclosed in this report.
11. MEANS OF COMMUNICATION
The Company publishes its quarterly un-audited (Provisional) financial results and Audited financial results in English and Hindi edition of Business Standard in terms of Clause 41 of the Listing Agreement.
12. GENERAL SHAREHOLDER INFORMATION
(a) Registered Office : S Global Knowledge Park, 19A & 19B, Sector- 125, Noida, Uttar Pradesh - 201301
(b) Annual General Meeting
Date : 30 th September, 2015
Time : 10.00 A M
Venue : S Global Knowledge Park, 19A & 19B, Sector- 125, Noida, Uttar Pradesh - 201301
(c) Financial Year ending : 31 st March every year
(d) Date of Book Closure : 26 th September, 2015 to 30 th September, 2015 (Both days inclusive)
(e) Stock Exchanges at : (1) Calcutta Stock Exchange Association Ltd. which Shares of the Company are listed (2) Bombay Stock Exchange Ltd.
(f) Stock Market Data
There has been no trading in the shares of the Company during the Financial Year under review.
The listing fee due for the year 2014-15 was duly paid to both the exchanges.
(g) Registrar and Transfer Agent:
MCS Share Transfer Agent Limited F-65, Okhla Industrial Area, Phase-I, New Delhi – 110020. Ph: 011-41406149-52, Fax:011-41709881 email: email@example.com Website: www.mcsdel.com
(h) Share Transfer System
The Company transfers the Shares in physical form and dispatch the same within 15 days from the date of their receipt, subject to the documents being valid and complete in all respects. The Stakeholders Relationship Committee looks into the issues relating to Investors Grievances.
(j) Dematerialisation of Shares and Liquidity
The ISIN Number for the Company's Shares is INE471D01019. The members are being provided the facility to get their shares dematerialized and further trading in equity shares of the Company on the stock exchanges is permitted in demat and physical form.
(k) Outstanding GDRs/ADRs/ Warrants or Convertible Instruments, conversion Date and likely impact on Equity : Not Applicable
Address for Investor Correspondence & fo any query on Annual Report
Company Secretary & Compliance officer Avon Mercantile Limited, S Global Knowledge Park, 19A & 19B, Sector-125, Noida, Uttar Pradesh -201301