CORPORATE GOVERNANCE REPORT:
1. Company's philosophy on code of Governance
In our view, Corporate Governance comprises of principles, processes and systems to be followed by the management to ensure accountability, transparency and fairness in all its transactions in the widest sense and to maximize value for shareholders. A good governance process, thus, should provide integrity, transparency and compliance with laws in letter and spirit in all dealings with Government, Customers, Suppliers, Employees and other stakeholders.
2. Board of Directors
Disclosure regarding brief profile of Directors as required under the Listing agreement entered into with BSE Limited is given below:
1) Mr. S C Malhotra is the Chairman of the Company since 3rd December, 1963. Before taking over Empire he was with Kohinoor Mills Division of Killick Industries Limited for six years as Chief Executive. He has substantially contributed to the growth of Empire. He has 65 years of experience and handles several corporate responsibilities. He is a Director of Empire International Private Limited and Arjun Transport Company Private Limited.
He is the Promoter of the Company and holds 95,582 shares of the Company in his name as on March 31, 2016.
2) Mr. Ranjit Malhotra is an MBA from the University of Texas. He is the son of Mr. S. C. Malhotra, Chairman of the Company. Mr. Ranjit Malhotra joined Empire in April 10, 1981. He is on the Board of the Company as Whole-time Director designated as Vice-Chairman since October 1, 1998. He is Instrumental in developing the property of the Company at Lower Parel and Vikhroli and giving the same on Leave & License basis to Multinational Companies and Banks. He is a Director of Empire International Private Limited, Randil Trading Co. Pvt. Ltd., Arjun Transport Co. Pvt. Ltd., Empire Technical Services Pvt. Ltd. and Chosen Finance Private Limited.
He is the Promoter of the Company and holds 9,68,403 shares of the Company in his name as on March 31, 2016.
3) Mr. Dileep Malhotra is an MBA from Le High University, USA. He is the son of Mr. S C Malhotra, Chairman of the Company. Mr. Dileep Malhotra joined
Empire in November 28, 1991. He is on the Board of the Company as Whole-time Director designated as Joint Managing Director since October 1, 1999. He has substantially contributed for the development of the Agency business of the Company. He is a Director of Empire International Private Limited, Randil Trading Co. Pvt. Ltd., Arjun Transport Co. Pvt. Ltd., Empire Technical Services Pvt. Ltd. and Chosen Finance Private Limited. He is also the Chairperson of the Risk Management Committee of the Company.
He is the Promoter of the Company and holds 14,75,975 shares of the Company in his name as on March 31, 2016.
4) Mrs. Uma Ranjit Malhotra is a Director of the Company since May, 29, 2014.
Mrs. Uma Malhotra graduated from St. Xavier's College, Mumbai. She is the daughter of Mr. Keshub Mahindra, Chairman Emeritus of the Mahindra Group of Companies. She is married to Mr. Ranjit Malhotra, Vice Chairman and Managing Director of Empire Industries since April 10, 1981. She owns and runs a School for underprivileged children. She is a Director of Arjun Transport Company Private Limited.
She is also the Chairperson of the CSR Committee of the Company.
Mrs. Uma Ranjit Malhotra holds 1,25,222 shares of the Company in her name as on March 31, 2016.
5) Mr. R. A. Maskati has been one of the senior most Director of the Company since July 4, 1972. He is a prominent figure in Business and has been connected with business for over 50 years.
He is a Director of Rane Private Limited, Kosmochem Private Limited, Maskati Investment Private Limited and D C Omrigar and Company Private Limited.
He is also the Chairman of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee of the Company.
Mr. Maskati holds 200 shares of the Company in his name as on March 31, 2016.
6) Mr. Rajbir Singh is a Director of the Company since June 28, 2007. He has wide contacts with the key personnel in financial institutions and banks. He has vast experience in arranging funds for financing projects. He is a successful financial consultant having more than 27 years experience and well known in the field. He is a Director of Kelly Handerson Private Limited, Sardar Bahadur Bakshi Dalip Singh & Son Private Limited. He is a partner in Anandini Solutions LLP.
He is also a Member of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee of the Company.
Mr. Singh holds 15 shares of the Company in his name as on March 31,2016.
7) Mr. Chandrakant Poonamchand Shah is a Director of the Company since September 1, 2008. He is also a member of the Audit Committee, Nomination hand Remuneration Committee and Stakeholders Relationship Committee of the Company.
He was a Joint Managing Director in Ramnord Research Laboratories Private Limited from 1972 to 1975 and continues to be a Director as on date. He has wide experience in Cotton Yarn Business.
He is a Director of Ramnord Research Laboratories Private Limited, Empress Tin Factory Private Limited, Randil Trading Company Private Limited and Empire Technical Services Private Limited.
Mr. Shah holds 50 shares of the Company in his name as on March 31, 2016.
8) Mr. Bipinchandra Chimanlal Gandhi is a Director of the Company since June 25, 2009.
Mr. Bipin Gandhi is a Science Graduate. He has undergone extensive training in bleaching, dyeing & printing machines as well as in dyestuff chemicals pertaining to textile industry. During his employment with Associated Textile Engineers he has undergone two years Implant Training in Germany. After his return from abroad he has worked with Baltex Engineering Private Limited as Sales Manager for Textile Machineries. In the Year 1968 he started a Company by name Commonwealth Textiles which was well recognized in textile industry. In the year 1977 he established another Company by name Comtex Engg. (Bom) Private Limited. He represents many well-known textile machinery manufacturers from Italy, Germany and Switzerland in his capacity as partner of Commonwealth Textiles.
Mr. Gandhi holds 15 shares of the Company in his name as on March 31, 2016.
9) Mr. Subodh Chandra is a Director of the Company since April 30, 2012.
Mr. Subodh Chandra and his family controls L.H. Sugar Factories Limited, one of the biggest sugar mills in Uttar Pradesh along with huge power cogeneration. He has been Chairman of this Company. He has vast experience in Sugar Industry and Agricultural Industry.
Mr. Subodh Chandra holds 15 shares of the Company in his name as on March 31, 2016.
Number of Board Meetings held and the dates on which held:
Five (5) Board Meetings were held on the following dates during the financial year.
(1) 25.05.2015 (2) 24.07.2015 (3) 30.10.2015 (4) 28.01.2016 (5) 08.03.2016
3. Audit Committee
(a) Brief description of terms of reference:
A. The Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall, inter alia, include,—
(1) oversight of the listed entity'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 listed entity;
(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) modified opinion(s) 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) reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
(8) approval or any subsequent modification of transactions of the listed entity with related parties;
(9) scrutiny of inter-corporate loans and investments;
(10) valuation of undertakings or assets of the listed entity, 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 chief financial officer 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.
B. The audit committee shall mandatorily review the following information:
(1) management discussion and analysis of financial condition and results of operations;
(2) statement of significant related party transactions (as defined by the audit committee), 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 shall be subject to review by the audit committee.
(6) statement of deviations:
(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1).
(b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice in terms of Regulation 32(7).
4. Nomination and Remuneration Committee
(a) The role of Nomination and Remuneration Committee is -
(1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;
(2) formulation of criteria for evaluation of performance of independent directors and the board of directors;
(3) devising a policy on diversity of board of directors;
(4) 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 of directors their appointment and removal.
(5) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
b. The Nomination and Remuneration Committee comprising of three independent Non-Executive Directors, viz., Mr. Rasheed A. Maskati, Chairperson; Mr. Rajbir Singh and Mr. C. P. Shah. The Nomination and Remuneration Committee reviews the remuneration package of Executive Directors and Senior Executives of the Company.
c. Attendance during the year: All members attended the Meetings held on 25.05.2015.
5. Remuneration of Directors:
Remuneration to Whole-time Directors and Company's employees is decided after considering the following factors:
(i) Restrictions specified in various Acts like Companies Act, Income Tax. Etc.
(ii) Market trend for remuneration paid for similar positions.
(iii) Performance of the person in the Company.
(iv) Profits of the company.
Details of remuneration to Directors for the year.
6. Stakeholders Relationship Committee
The Stakeholders Relationship Committee comprises of three Independent/Non-Executive Directors as per details mentioned hereunder:
Name of non-executive director heading the Committee: Mr. Rasheed A. Maskati
Name and Designation of compliance officer: Mr. S. K. Gulati, Director-Finance & Company Secretary
Number of shareholders’ complaints received so far: 10 (Ten)
Number of complaints resolved to the satisfaction of shareholders10 (Ten)
Number of pending complaints: Nil
7. Means of communication
(a) Quarterly results: Advertisement in 'Free Press Journal' and 'Navshakti' within 48 hours of Board Meeting.
(b) Newspapers wherein results normally published: Free Press Journal & Navshakti.
(c) Any website, where displayed : www.empiremumbai . com
(d) Whether it also displays official news releases : yes
(e) The presentations made to institutional investors or to the analysts: Only on request.
8. General Shareholder information
(a) AGM Date, Time and at: Saturday, the 30th July, 2016 11.30 a.m.
Venue Hall of Culture, Ground Floor, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai 400 018.
(b) Financial year :
(c) Date of Book closure :
Saturday the 23rd July, 2016 to Saturday the 30th July, 2016 (both days inclusive).
(d) Dividend Payment Date
5th August, 2016
(e) Listing on Stock :
BSE Limited, P J Tower, Exchanges Dalal Street, Mumbai 400 023.
(f) Stock Code :
(g) Registrar and Transfer Agents
M/s. Bigshare Services Pvt. Ltd.,
E-2 Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E) Mumbai 400072.
Tel: +91 22 28470652 / 40430200 Fax: +91 2228475207
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(h) Share Transfer System:
Transfers in respect of shares in physical form and other related issues are approved by the Chairman authorized by the Board and approvals are obtained at intervals not exceeding 15 days.
(i) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity :
(j) Plant Locations :
Vitrum Glass, L.B.S. Marg, Vikhroli, Mumbai - 400 083.
(o) Address for correspondence:
EMPIRE INDUSTRIES LIMITED
Secretarial Department Empire Complex, 414, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013. Telephone : 66555453 Fax : 24939143 Email: investor_relations @empiremumbai.com Website: www.empiremumbai.com
9. Other Disclosures:
(a) There are no materially significant related party transactions that may have potential conflict with the interests of the Company at large;
(b) There are no non-compliance by the Company, penalties, strictures imposed on the Company by stock exchange(s) or the board or any statutory authority, on any matter related to capital markets, during the last three years;
(c) Vigil mechanism, whistle blower policy are placed on the Company's website, and affirm that no personnel has been denied access to the audit committee;
(d) The Company has complied with all mandatory requirements.
(e) The Company has no subsidiaries.
(f) Requirement of policy on dealing with related party transactions on weblink shall be complied with.
(g) Disclosure of commodity price risks and commodity hedging activities: Not applicable to our Company.
On obtaining confirmations from the Divisions of the Company, a declaration regarding compliance with the provisions of the various statutes is made by the Managing Director at Board Meetings. The Company Secretary, as Compliance Officer, ensures compliance with SEBI regulations and provisions of the Listing Agreements.
Statements in the Management Discussion and Analysis describing Company's objectives, projections, expectations are within the meaning of relevant securities laws, rules and regulations. The actual results may differ materially from the projections, expectations. Important factors which could be reasons for such differences may be Government policy amendments in taxation laws and other economic developments within and/or outside India.
On Behalf of the Board of Directors
S. C. MALHOTRA
Place : Mumbai
Date : May 26, 2016