CORPORATE GOVERNANCE REPORT
1. The Company's Corporate Governance Policies
We believe that it is imperative for us to manage our business affairs in the most fair and transparent manner with a firm commitment to our values. The corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. Our corporate governance framework is a reflection of our culture, our policies, our relationships with shareholders and our commitment to values. Accordingly, we always seek to ensure that our performance is driven by integrity. This is vital to gain and retain the trust of our stakeholders.
The securities and Exchange Board of India (SEBI) amended the Listing Agreement effective October 1, 2014, to bring in additional corporate governance norms for listed entities. These provides for stricter disclosures and protections of Investors rights, including equitable treatment for minority and foreign shareholders.
The amended rules requires companies to get shareholders approval for related party transactions, establish whistleblower mechanisms, elaborate disclosures on pay package and have at least one woman director on their board. The amended norms are aligned with the provision of the Companies Act, 2013, and are aimed to encourage companies to 'adopt best practices on corporate governance'.
Our corporate governance framework ensures that we make timely disclosures and share accurate information regarding Composition, Category of Directors and their other directorship as on March 31, 2015. our financials and performance, as well as the leadership and governance of the Company.
Our corporate governance philosophy is based on the following principles:
• Corporate governance standards should satisfy both the spirit of the law and the letter of the law.
• Ensure transparency and maintain a high level of disclosure.
• Clearly distinguish between personal conveniences and corporate resources.
• Communication externally, and truthfully, about how the Company is run internally.
• Have a simple and transparent corporate structure driven solely by business needs.
• The management is the trustee of the shareholders' capital and not the owner.
2. Board of Directors
As on March 31, 2015 the Company's Board consisted of Eight Directors comprising a Managing Director and Seven Non- Executive Directors. Board consists of Five independent Directors. None of the Directors on the Board is a Member of more than Ten Committees and Chairman of more than Five Committees across all the companies in which he is a Director. The necessary disclosures regarding Committee positions have been made by Directors.
Induction & Training of Board Members:
On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction programme. The induction for Independent Directors include interactive sessions with the Functional Heads.
One of the key functions of Board is to monitor and review the Board evaluation framework. During the year, the Board adopted a formal mechanism for evaluating performance of the directors individually , the evaluation of the Overall Board , Fellow Board Members including Chairman of the Board as well as that of its Committees. The performance evaluation of Independent Directors is done by the entire Board of Directors excluding the Director being evaluated. The exercise was carried out through a structured evaluation process covering various aspects of the Board's functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, governance issues , inflow of information, decision making , company's performance, company strategy etc. on a scale of one to five. Feedback on each director is encouraged to be provided. Individual Directors including the Board Chairman's evaluation was on parameters such as attendance, participation in Board and Committee meetings, contribution at the meetings and otherwise, independent judgement etc.
Code of Conduct:
The code of conduct for the members of the Board of Directors is detailed out in Director's Report. Whistle Blower Policy:
The Company has in place a Vigil mechanism for Directors and Employees. The details of Whistle Blower policy are set out in Directors Report.
Board Meetings, Annual General Meeting and Attendance during the year :
The Board generally meets 5 times during the year. Additional meetings are held when necessary. During the year ended on March 31, 2015 the Board of Directors had 6 meetings. These were held on 30th May, 2014, August 8, 2014, November 12, 2014, January, 10, 2015, February 13, 2015 and March 13, 2015. The last Annual General Meeting (AGM) was held on September 27, 2014. The attendance record of the Directors at the Board Meetings during the year ended on March 31, 2015 and at the last AGM is as under:
Emoluments & benefits paid to Managing Director & CEO is Rs. 40,32,000/- p.a. Non-Executive Directors who attend the Board/Audit Committee meetings are paid sitting fees. During the Financial year a sum of Rs. 3,95,000/- has been paid as sitting fees for Board and other Committee Meetings.
Separate Meeting of Independent Directors:
Pursuant to Schedule IV of the Companies Act, 2013 and the Rules made thereunder, the independent directors of the
Company shall hold atleast one meeting in a year, without the attendance of non-independent directors and members of the Management. All the independent directors shall strive to be present at such meetings. The meeting shall review the performance of non-independent directors and the Board as a whole, review the performance of the chairman of the board taking into account the views of the Executive director and Non-executive directors.
A separate meeting of the Independent Directors of the Company was held on February 13, 2015 wherein Independent Directors Mr. Jamshed Delvadavala, Mr. Raghunandan Maluste,
Mr. Shardul Thacker and Mr. Reyaz Mama met without any Non-Independent Directors and Senior Management Personnel. The performance of Non-Independent Directors (including Chairman) and the Board as a whole was reviewed. The Independent Directors also reviewed the quality, content and timelines of the flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform and discharge their duties.
3. Audit Committee
(a) Qualified and Independent Audit Committee
The Company complies with section 177 of the Companies Act, 2013 as well as requirement under the listing agreement pertaining to the Audit committee. Its functioning is as under:
• The audit committee presently consists of the four Independent Directors
• Majority of the Members of the Committee are financially literate and having the requisite financial management expertise;
• The Chairman of the Audit Committee is an Independent Director;
• The chairman of the Audit Committee was present at the last Annual General Meeting held on 27th September, 2014.
B) Terms of reference
The terms of reference of the Audit Committee include inter-alias:
• Oversight of the Company's financial reporting process and the disclosures of its financial information.
• Recommendation for appointment, remuneration and terms of appointment of auditors of the company.
• Approval of payment to statutory auditors for any other services rendered by them.
• Reviewing, with the management, the annual financial statements and auditor's report thereon.
• Matter required to be included in the Directors responsibility statements to be included in the Board's report.
• Changes, if any, accounting policies and practices and reason for the same.
• Major accounting entries involving estimates based on the exercise of judgment by management.
• Significant adjustment made in the financial statements arising out of audit findings.
• Compliance with listing and other legal requirements relating to financial statements.
• Approval of related party transactions as per policy of the company.
• Review and monitor the auditor's independence and performance, and effectiveness of audit process.
• Scrutiny of inter-corporate loans and investments.
• Evaluation of inter financial controls and risk management system.
• Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control system.
• Reviewing the adequacy of internal audit function, if any, including frequency of internal audit.
• Discussion with internal auditors of any significant findings and follow up there on.
• Reviewing the finding of any internal observation by the internal auditors into matter where there is irregularity or a failure of internal control system of a material nature and reporting the matter to the board.
• 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.
• To review the functioning of the vigil mechanism.
• Management discussion and analysis of financial condition and results of operations.
C) Compositions, names of members and chairperson, its meetings and attendance :
The Audit Committee consists of only Independent Directors. The details of its composition are as follows:
Mr. Jamshed Delvadavala - Chairman
Mr. V. P. Raikar - Member
Mr. Reyaz Mama - Member
Mr. Raghunandan Maluste - Member
4. Nomination & Remuneration Committee
During the financial year the Remuneration committee of the Company was redesignated and reconstituted by inducting Mr. Shardul Thacker as a member of the Committee. The committee was reconstituted on November 12, 2014 with Mr. Raghunandan Maluste as its Chairman. The Committee comprises of four Independent Directors.
Brief description of terms of reference of Remuneration Committee, inter alia are:
a) Review the performance of the Managing Director, after considering the company's performance.
b) Recommend to the Board remuneration including salary, perquisite etc. to be paid to the Managing Director.
c) To formulate criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors and key managerial personnel and other employees.
d) To identify persons who are qualified to become Directors and who may be appointed in Senior Management, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance.
e) Formulation of criteria for evaluation of Independent Directors and the Board.
f) Devising a policy on Board diversity.
Remuneration to Managing Director & C.E.O and to NonExecutive Directors:
Emoluments & benefits paid to Managing Director & CEO is Rs. 40,32,000/- p.a. Non-Executive Directors who attend the Board/ Other Committee meetings are paid sitting fees. During the Financial year a sum of Rs. 3,95,000/- has been paid as sitting fees for attending Board and other Committee Meetings.
The Nomination & Remuneration Committee comprises of four Directors as under:
Mr. Raghunandan Maluste - Chairman Mr. Reyaz Mama - Member Mr. Jamshed Delvadavala - Member Mr. Shardul Thacker – Member Company Secretary Ms. Asmeeta Matondkar is Secretary of the Committee.
(i) There has been no pecuniary relationship or transactions other than above of the Non-Executive Directors vis-a-vis the Company during the year under review.
(ii) Directors other than Managing Director who attend Board and Committee Meetings are paid sitting fees of Rs. 10,000/- per Board meeting and Rs. 10,000/- per Audit Committee meeting. A sitting fee of Rs. 5,000/-is paid for attending other Committee meetings.
Policy for Selection and Appointment of Directors and Their Remuneration:
The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2015 the Board consists of 8 members consisting of one executive or whole time director, 5 independent directors and 2 non- executive directors. The policy of the Company on director's appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of section 178 of the Companies Act, 2013, adopted by the Board, is appended as an Annexure to the Board's Report.
Policy on Board Diversity
The Company recognizes and embraces the importance of the diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender. The Nomination and Remuneration Committee devises the policy on Board diversity to provide for having a broad experience and diversity on the Board. The Board Diversity Policy is available on our website, http://cidadedegoa.com/images/Board-Diversity-Policy.pdf The Nomination and Remuneration policy is available on our website, http://www.cidadedegoa.com/images/Nomination-and-Remuneration-Policy.pdf
Independent Director's Familiarization Programme
Clause 49(II)(B)(7) of the Listing Agreement (effective from October 1,2014) with the Stock Exchanges stipulates that: The Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. through various programmes. The Company has adopted the familiarization programme for Independent Directors and the details of which are uploaded on the website of the Company - http://www.cidadedegoa.com/ images/FamilirisationProgramme-for-IndependentDirectors.pdf/
5. Stakeholders Relationship Committee
The Board of Directors at its meeting held on November 12, 2014, reconstituted the Committee and the nomenclature of the Shareholders Grievance Committee was changed to Stakeholders Relationship Committee. The terms of reference of the Stakeholders Relationship Committee is to specifically look into the redressal of grievances of shareholders and other security holders. The Committee shall consider and resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. Information related to transfer of unclaimed dividend to IEPF and Un-claimed Dividend are provided separately under shareholders information.
The Committee comprises of three Directors as under:
Company Secretary Ms. Asmeeta Matondkar is Secretary of the Committee.
During the year, 26 complaints were received from shareholders and investors. All the complaints have been resolved to the satisfaction of the complainants and no investor complaint was pending at the beginning or at the end of the year. The Company has acted upon all valid requests for share transfer received during 2014-15 and no such transfer is pending.
Pursuant to Clause 47 (c) of the Listing Agreement a certificate on half yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary has been submitted to the Stock Exchanges within stipulated time.
6. Corporate Social Responsibility Committee
The Company over the years have been striving to achieve a fine balance of economic, environmental and social imperatives. The Company's CSR is not limited to philanthropy, but encompasses community development and sustainability related initiatives.
As required under section 135 of the Companies Act, 2013 the company has formed a CSR committee on May 30, 2014.
Composition of CSR committee, terms of reference, its meetings and attendance :
The Committee comprises Mr. Reyaz Mama, an Independent Director as the Chairman of the Committee and Mr. Shardul Thacker, Jamshed Delvadavala, Independent Directors and Mrs. Anju Timblo, Managing Director as other members of the Committee. The Company Secretary, acts as the Secretary to the Committee.
(B) Terms of Reference:
(i) To formulate and recommend to the Board, a CSR Policy and the activities to be undertaken by the Company as per Schedule VII of the Companies Act, 2013;
(ii) To recommend amount of expenditure on CSR activities;
(iii) To monitor CSR activities of the Company.
During the year the Committee met on February 13, 2015.
The Committee adopted the amended policy on CSR which strives for economic development that positively impacts the society at large, by promoting education, providing health care & destitute care.
The CSR policy of the Company is available on our website, http://cidadedegoa.com/images/CSR-Policy-of-Fomento.pdf
7. Risk Management Committee:
The Risk Management Committee was constituted by the Board of Directors, at its meeting held on November 12, 2014. Mr. Jamshed Delvadavala, Independent Director is the Chairman of the Committee. Mr. Reyaz Mama, Independent Director, Mr. Raghunandan Maluste, Independent Director, Mrs. Anju Timblo, Managing Director & CEO, Mr. M.A. Hajare, Chief Financial Officer and Mr. Satish Agrahar, Financial Controller are the other members of the Committee.
The Company Secretary acts as the Secretary to the Committee.
The roles and responsibilities of the Risk Management Committee are as prescribed under Clause 49 of the Listing Agreement, as amended from time to time, and includes monitoring and review of risk management plan on a half yearly basis and reporting the same to the Board of Directors, in addition to any other terms as may be referred by the Board of Directors, from time to time.
The Enterprise Risk Management (ERM) framework of the Company encompasses practice relating to the identification, assessment, monitoring and mitigation of strategic, operational and external environment risks to achieve key business objective. ERM framework at the Company seeks to minimize the adverse impact of risks to our key business objectives and enables the company to leverage market opportunities effectively. Our risk management practices seek to sustain and enhance the long-term competitive advantage of the Company.
8. CEO/CFO certification:
The Managing Director and the Chief Financial Officer of the Company have certified to the Board of Directors, inter alia, the accuracy of financial statements and adequacy of internal controls for the financial reporting purpose as required under Clause 49(IX) of the Listing Agreement, for the year ended March 31, 2015.
a) The Board has received disclosures from Key Managerial Personnel relating to material, financial and commercial transactions that they and/or their relatives donot have any personal interest. There are no materially significant related party transactions made by the Company with its promoters, their subsidiaries, directors, senior management or relatives etc, which may have potential conflict with the interest of the Company at large. The Company has formulated a policy on materiality of Related Party Transactions. The policy is also available on the website of the Company (weblink http://cidadedegoa.com/images/ Related-Party-transactions-Policy-of-Fomento.pdf)
b) Incorporated in the Annual Report are the disclosures of transactions with related parties in compliance with Accounting Standard AS-18.
c) The company has complied with the requirements of the Stock Exchanges, SEBI, Ministry of Company. Affairs and other statutory authorities on all matters relating to capital markets during the last three years. No penalties or strictures have been imposed on the Company by the Stock Exchange, SEBI, Ministry of Company Affairs or other statutory authorities relating to the above during the last three years.
d) The Directors and other identified persons have observed and complied with the requirements of the Code of Conduct of the Company and regulation for Prevention of Insider Trading in Equity Shares of the Company in accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.
e) The Board of Directors regularly reviews the Risk Management strategy of the company to ensure the effectiveness of the Risk Management policy and procedure.
f) Statutory Auditor have certified that the Company has compiled with the conditions of Corporate Governance. This certificate will be sent to the Stock Exchanges along with the Annual Report of the Company.
g) The Company complies with all the requirement of Listing Agreement including the mandatory requirements of clause 49 of the Listing Agreement.
h) The Company has a comprehensive Risk Management policy, the key risks associated with the business of the Company and the measures taken to minimize the same are discussed in Management Discussion & Analysis Report.
i) During the year ended March 31, 2015 the Company does not have any material listed/unlisted subsidiary companies as defined in Clause 49 of the Listing Agreement. However, The Company has in place a policy for determining "material subsidiary" and the same is disclosed on the Company's website.
j) The Independent Directors have confirmed that they meet the criteria of "Independence" as stipulated under Clause 49 of the Listing Agreement.
k) The financial statements of the Company have been prepared in accordance with the Accounting Standards notified under section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The Accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
l) The Company has allotted Preference shares and the details of allotment forms part of the Directors Report.
10. Non - Mandatory Requirements under Clause 49 of Listing Agreement
The status of compliance with non-mandatory recommendations of the Clause 49 of the Listing Agreement with Stock Exchanges is provided below:
1. Non-Executive Chairman's Office: Chairman's office is separate from that of the Managing Director & CEO. The expenses related to Chairman's office are not met by the Company.
2. As the quarterly and half yearly financial statements are published in the news papers and are posted on the Company's website, the same are not being sent to the shareholders.
3. Audit Qualifications: The Company's financial statement for the year ended March 31, 2015 does not contain any audit qualification.
4. Separate posts of Chairman and CEO: Mr. Auduth Timblo is the Non-Executive Chairman and Mrs. Anju Timblo is the Managing Director of the Company.
5. Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee.
12. Postal Ballot
The Company has obtained the approval of the shareholders through voting by postal ballot dated December 23, 2014 in terms of provisions of section 110 of the Companies Act, 2013 read with the applicable rules of the Companies (Management and Administration) Rules, 2014 and passed the following Special Resolutions:
1. Delisting of the Equity Shares of the Company from BSE Limited and Ahmedabad Stock Exchange Limited.
Voting Pattern and Procedure for Postal Ballot:
1. The Board of Directors of the Company, had appointed Mr. Shivaram Bhat as the Scrutinizer for conducting the Postal Ballot voting process at their meeting held on November 12, 2014.
2. The Company had completed the dispatch of the Postal Ballot notice dated November 12, 2014 together with the Explanatory Statement on November 18, 2014 along with Forms and Postage Prepaid Business Reply Envelopes to all the shareholders whose name(s) appeared on the Register of Members/List of Beneficiaries as on November 14, 2014.
3. The voting under the Postal Ballot was kept open from November 20, 2014 to December 19, 2014.
4. Particulars of Postal Ballot Forms received from the Members using the Electronic platform of NSDL were entered in a register separately mentioned for the purpose.
5. The Postal Ballot forms were kept under safe custody in sealed and tamper proof ballot boxes before commencing scrutiny of such postal ballot forms.
6. All Postal Ballot forms received/receivable upto the close of working hours on December 19, 2014 the last date and time fixed by the Company for receipt of the forms, had been considered for scrutiny.
7. Envelopes containing Postal Ballots forms received after close of business hours on December 19, 2014 had not been considered for his scrutiny.
8. On December 23, 2014 Mr. V. P. Raikar, Director announced the following results of the Postal Ballot as per the Scrutinizers report.
13. General Shareholders Information
1. Annual General Meeting
Date: September 28, 2015
Time: 4:00 p.m.
Venue: Cidade de Goa, Vainguinim Beach, Goa - 403004
2. Financial Year 2015-16
For the year ending March 31, 2016 the results will be announced as per the tentative Schedules below:
First Quarter Results On or before August 14, 2015
Second Quarter Results On or before November 14, 2015
Third Quarter Results On or before February 14, 2016
Audited Annual Results On or before May 30, 2016
3. Dates of Book Closure
The Register of Members and share Transfer Register will remain closed for a period of 7 days from Friday 21st August 2015, to Thusday 27th August, 2015 (both days inclusive).
1. Unclaimed dividend
Section 124 of the Companies Act, 2013, mandates that companies transfer dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). The details are as under:
2. Listing on Stock Exchanges
The shares of the Company have been listed on The Bombay Stock Exchange Limited, Mumbai and The Ahmedabad Stock Exchange Limited, Ahmedabad. The annual listing fees for the financial year 2014-15 to both these stock Exchanges have been paid.
3. Stock Code
The Stock Exchange Stock Code
Bombay Stock Exchange Limited 503831
Ahmedabad Stock Exchange Limited 17410
ISIN Number for NSDL/CDSL INE241E01014
4. Registrar and Share Transfer Agents
Bigshare Services Private Limited Unit: Fomento Resorts and Hotels Limited E/2, Ansa Industrial Estate, Saki-Vihar Road, Sakinaka - Andheri (E), Mumbai - 400072 Phone No. 022-40430200 Fax No. 022-28475207 Email id: firstname.lastname@example.org Website: www.bigshareonline.com
5. Share Transfer System
(a) Trading in equity shares of the Company is permitted only in dematerialised form.
(b) Requests for dematerialization of shares are processed and confirmation thereof is given to the respective depositories i.e. National Securities Depository Ltd. (NSDL) and Central Depository Services India Limited (CDSL) within the statutory time limit from the date of receipt of share certificates provided the documents are complete in all respects.
(c) Shares sent for transfer in physical form are normally processed within a period of 15 days of receipt of the documents, provided all documents are valid and complete in all respects.
6. Dematerialisation of Shares and Liquidity
The total number of shares in dematerialised form as on 31st March, 2015 is 1,54,32,443 representing 96.45% of the total number of shares of the Company.
The equity shares of the Company are actively traded on the BSE.
7. Address for Correspondence
Shareholders correspondence should be addressed to:
The Company Secretary, Fomento Resorts and Hotels Limited Unit: Cidade de Goa, Vainguinim beach, Dona Paula, Goa – 403004 Phone No.: 0832-2454545 Fax no.: 0832-2454542 Email: email@example.com
Registrar & Share Transfer Agents
Bigshare Services Private Limited Unit: Fomento Resorts and Hotels Limited E/2, Ansa Industrial Estate Saki-Vihar Road, Sakinaka – Andheri (E), Mumbai – 400072 Phone No. 022-40430200 Fax No. 022-28475207 Email id: firstname.lastname@example.orgOther useful information for Shareholders:
a) For expeditious transfer of shares, shareholders should fill in complete and correct particulars in the transfer deed.
b) Shareholders of the Company who have multiple accounts in identical name(s) or holding more than one Share Certificate in the same name with different Ledger Folio(s) are requested to apply for consolidation of Folio(s) and send the relevant Share Certificates to the Registrar and Share Transfer Agents.
c) Shareholders are requested to quote their e-mail id, telephone/ fax numbers to get prompt reply to their communication.