CORPORATE GOVERNANCE REPORT 2014-15
1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
At GESL, we believe that as we move towards achieving our growth targets, our Corporate Governance processes must adhere to the globally benchmarked standards. Corporate Governance is an integral element of the Company's value system, management ethos and business practices. Our Corporate Governance practices are driven by timely disclosures, transparent accounting policies and high levels of integrity in decision-making. The Company believes that the governance process should ensure that the resources employed must be utilised optimally so as to meet the stakeholders' aspirations and expectations. This is demonstrated in improving shareholder returns and performance focused work environment. Our customers have benefited from the high quality products made available to them at reasonable prices. Our employee satisfaction is reflected in the stability of our senior management and substantially high productivity. The Company is committed to contribute to the "Triple Bottom Line" i.e. ensuring the conduct of business around social, environmental and economic concerns and this is apparently reflected in the Company's area of business. GESL's governance philosophy revolves around trusteeship, transparency, control, accountability and ethical business conduct. The practice of each of these enables the management to direct and control the affairs of the Company in an efficient manner and in creating the right corporate culture towards emerging as a socially responsible corporate citizen.
2. BOARD OF DIRECTORS
A. Composition of Board of Directors, attendance at Board Meetings, at last Annual General Meeting and details of Membership of other Boards / Committees:
The Board has an optimum combination of Executive and Non-Executive Directors as per the Corporate Governance requirements.
3. AUDIT COMMITTEE
The Company has an Audit Committee which was reconstituted in the Board Meeting held on 13.11.2014. As on 31.03.2015, the committee consisted of six Directors namely, Mr. Pradeep Kumar Goenka (Chairman), Mr. Surendra Kumar Kabra, Mr. Vishnu Dutt Khandelwal, Mr. Vishwa Nath Chandak, Mr. Anoop Gupta and Mr. Abhilash Lal.
Mr. Pradeep Kumar Goenka, Mr. Surendra Kumar Kabra and Mr. Anoop Gupta are Chartered Accountants. Mr. Vishnu Dutt Khandelwal is Post Graduate in Commerce and has also rich experience in the field of Accounting and Financial Management. Mr. Vishwa Nath Chandak is M. Com., L.L.B. and has rich experience in the Textile Industry. Mr. Abhilash Lal is Post Graduate in Management from IIM, Bangalore and has also rich experience in all aspects of financial services.
Mr. Bharat Kumar Sajnani, Company Secretary of the Company also acts as Secretary to the Committee.
Terms of Reference:
The terms of reference of the Audit Committee are in conformity with the requirements specified in Clause 49 of the Listing Agreement with Stock Exchanges and also comply with the requirements of Section 177 of the Companies Act, 2013.
Brief description of terms of reference:
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 statutory auditors including cost 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 judgement by the 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 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 utilization 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 after assessing the qualifications, experience and background, etc. of the candidate.
20. Reviewing the reports of the Company's Cost Auditors.
21. Reviewing the following information:
- Management Discussion and Analysis of financial condition and results of operations;
- Statement of significant related party transactions, submitted by management;
- Management letter(s) of internal control weaknesses, if any, issued by statutory auditors;
- Internal Audit Reports relating to internal control weaknesses; and
- Appointment, removal and terms of remuneration of internal auditor.
22. Carrying out such other functions as may be specifically referred to the Committee by the Board of Directors of the Company.
During the financial year ended 31st March, 2015, four Audit Committee Meetings were held on 30.05.2014, 14.08.2014, 13.11.2014 and 31.01.2015. Chief Financial Officer, Internal Auditors and the Statutory Auditors were invited to be present at the Audit Committee Meetings.
4. NOMINATION AND REMUNERATION COMMITTEE
In compliance with the provisions of Section 178 of the Companies Act, 2013 the Board has changed the nomenclature of the "Remuneration Committee" to "Nomination and Remuneration Committee" at its meeting held on 13.11.2014.The Nomination and Remuneration Committee of the Board consists of three Directors namely, Mr. Surendra Kumar Kabra (Chairman), Mr. Pradeep Kumar Goenka and Mr. Vishwa Nath Chandak.
Terms of Reference:
The terms of reference of the Nomination and Remuneration Committee are in conformity with the requirements specified in Clause 49 of the Listing Agreement with Stock Exchanges and also comply with the requirements of Section 178 of the Companies Act, 2013.
Brief description of terms of reference:
1. 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.
2. Formulation of criteria for evaluation of Independent Directors and the Board.
3. Devising policy on Board diversity.
4. Indentifying 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.
During the year ended 31st March, 2015, one Nomination and Remuneration Committee Meeting was held on 13.11.2014.
In compliance of Section 178(3) of the Companies Act, 2013 and Clause 49 of listing agreement, the Company has adopted Policy on Nomination, Remuneration and Board Diversity which is forming part of this annual report.
Details of Remuneration of the Directors for the financial year 2014-15:
i. Executive Directors:
The Company pays remuneration to the Executive Directors by way of salary, perquisites and allowances (fixed component) and performance linked remuneration (variable component). The amount of performance linked remuneration payable to such Directors is determined by the Board.
ii. Non-Executive Directors:
Non-Executive Directors (NEDs) of the Company play a crucial role to the independent functioning of the board. They bring in external and wider perspective to the decision-making by the board. They provide leadership and strategic guidance, while maintaining objective judgement.
The Non-Executive Directors (NEDs) are paid remuneration by way of Sitting Fees and Commission. They are paid sitting fees at the rate of Rs.5,000/- per meeting for attending every Board Meeting as well as Audit Committee Meeting. In the light of the services rendered by the NEDs to the Company, the Members, at the 23rd Annual General Meeting of the Company approved payment of remuneration to NEDs of the Company, by way of commission upto 1% on the net profit of the Company. The distribution of commission amongst the NEDs is determined by the Board. The Board decided that such commission shall be distributed in following manner for the year 2014-15 amongst the Non-Executive Directors on the basis of their attendance and contribution at the Board and Audit Committee Meetings (subject to maximum limit of Rs.5,00,000/- for each such Director, as decided by the Board at its meeting held on 14.02.2013).
5. STAKEHOLDERS RELATIONSHIP COMMITTEE
In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement the Board has changed the nomenclature of the "Share Transfer and Investor Grievances Committee" to "Stakeholders Relationship Committee" at its meeting held on 13.11.2014.
The Stakeholders Relationship Committee of the Board comprises of four Directors namely, Mr. Pradeep Kumar Goenka (Chairman), Mr. Shyam Sunder Sharmma, Mr. Vishnu Dutt Khandelwal and Mr. Sharad Sharma.
Terms of Reference:
The Stakeholders Relationship Committee looks into all the matters relating to transfer/transmission of shares and redressal of investors' grievances like non-receipt of annual reports, non-receipt of dividend warrants, etc. The Committee also oversees the working of Registrar and Transfer Agents of the Company.
The Committee has been holding regular meetings to ensure compliance with the provisions of the Companies Act, 2013 and the Listing Guidelines and to ensure proper service to investors.
Compliance Officer of the Company: Mr. Bharat Kumar Sajnani, Company Secretary.
6. SECURITIES ALLOTMENT AND CERTIFICATE ISSUANCE COMMITTEE
The Securities Allotment and Certificate Issuance Committee of the Board consists of three Directors namely, Mr. Pradeep Kumar Goenka (Chairman), Mr. Surendra Kumar Kabra and Mr. Shyam Sunder Sharmma.
Terms of Reference:
The Committee looks into all matters relating to allotment of securities, issuance of certificates of shares/ debentures/ bonds and other securities upon allotment/ split/ consolidation/ renewal thereof and issuance of duplicate certificates of securities.
During the financial year ended 31st March, 2015, two Securities Allotment and Certificate Issuance Committee meetings were held on 29.11.2014 and 23.02.2015.
7. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Pursuant to Section 135 of the Companies Act, 2013, the Corporate Social Responsibility (CSR) Committee was constituted on 13.11.2014 which consists of four Directors namely, Mr. Abhilash Lal (Chairman), Mr. Vishnu Dutt Khandelwal, Mr. Sharad Sharma and Mr. Pradeep Kumar Goenka.
Terms of Reference:
The Committee has been constituted with the following terms of reference:
1. To formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII.
2. To review and recommend the amount of expenditure to be incurred on the activities referred to in clause (a) above.
3. To monitor the CSR policy of the Company from time to time.
4. To institute a transparent monitoring mechanism for implementation of the CSR projects/programs/ activities undertaken by the Company.
5. Any other matter as the committee may deem appropriate after approval of the Board of Directors or as may be directed by the Board of Directors from time to time.
During the year ended 31st March, 2015, one Corporate Social Responsibility (CSR) Committee Meeting was held on 13.11.2014.
In compliance of Section 135 of the Companies Act, 2013 read with CSR Policy Rules, 2014, the Board has formulated Policy on Corporate Social Responsibility, which is uploaded on the website of the Company.
a) Disclosures on materially significant related party transactions of the Company of material nature, with its promoters, directors or with its management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large:
None of the transactions with any of the related parties were in conflict with the interests of the Company.
b) Details of non-compliance by the Company, penalties, strictures imposed on the Company by the Stock Exchanges, Securities and Exchange Board of India or any other statutory authorities on matters relating to Capital Markets during the last three years:
10. WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated Whistle Blower Policy for vigil mechanism for Directors and employees to report to the management about the unethical behavior, actual or suspected fraud, violation of Code of Conduct or legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc. The vigil mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional cases. No complaint has been received during the year as affirmed by the Chairman of Audit Committee & Whistle and Ethics Officer of the Company.
11. INDEPENDENT DIRECTORS MEETING
During the year ended 31st March, 2015, one Independent Directors Meeting was held on 31.01.2015. At the meeting, the Independent Directors inter-alia:
1. Reviewed the performance of non-independent directors and the Board as a whole;
2. Reviewed the performance of the Chairperson of the Company; and
3. Assessed 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.
Mr. Surendra Kumar Kabra, Mr. Pradeep Kumar Goenka, Mr. Vishwa Nath Chandak, Mr. Abhilash Lal and Mr. Narayanan Subramaniam were present at the meeting.
12. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Board members are provided with necessary documents and reports to enable them to familiarise with the Company's procedures and practices. Periodic presentations are made at the Board and Board Committee meetings, on business and performance updates of the Company, business strategy and risks involved.
Quarterly updates on relevant statutory changes encompassing important laws are regularly informed to the Directors.
The details of Familiarization Programme for Independent Directors are posted on the Company's website at the following web link: www.ganeshaecosphere.com/pdf/familiarization-programme-independent-director.pdf
13. MEANS OF COMMUNICATION
The quarterly and annual financial results of the Company are submitted to the Stock Exchanges and published in 'Business Standard' (in English and Hindi) newspaper in terms of the requirements of Clause 41 of the Listing Agreement.
The Financial results are also available on the official website of the BSE Limited and National Stock Exchange of India Limited, Mumbai i.e. www.bseindia.com & www.nseindia.com , respectively.
The Financial results and Annual Report of the Company along with official news releases and presentations made to Institutional Investors and Analysts are posted on the Company's official website i.e. www.ganeshaecosphere.com , from time to time.
The 'Management Discussion and Analysis Report' is given separately forming part of the Annual Report.
14. GENERAL SHAREHOLDERS' INFORMATION
A. Annual General Meeting:
Date : 19th September, 2015
Time : 1:00 p.m.
Venue : Raipur (Rania), Kalpi Road, Distt. Kanpur Dehat.
B. Financial Year/Calendar:
Particulars of Quarter On or before
First Quarter 14.08.2015
Second Quarter 14.11.2015
Third Quarter 14.02.2016
Fourth Quarter & Annual Results 30.05.2016
C. Date of Book Closure:
From Sunday, 13th September, 2015 to Saturday, 19th September, 2015 (both days inclusive).
D. Dividend Payment Date:
On and after 24th September, 2015.
E. Listing on Stock Exchanges:
The Company's Equity Shares are listed at following Stock Exchanges:
• BSE Limited, Mumbai and
• National Stock Exchange of India Limited, Mumbai (w.e.f. 09.03.2015).
The annual listing fee to these stock exchanges has been paid up-to-date.
F. Stock Codes - Equity Shares:
• BSE Limited. Mumbai: 514167
• National Stock Exchange of India Limited: GANECOS
G. Registrar and Share Transfer Agents:
Skyline Financial Services Pvt. Ltd.
D-153/A, First Floor, Okhla Industrial Area, Phase-I, New Delhi-110020
Tel: 011- 26812682-83 E-mail: email@example.com
H. Share Transfer System:
Applications for transfer of shares in physical form are processed by the Company's Registrar and Transfer Agent, M/s. Skyline Financial Services Pvt. Ltd. The Stakeholders Relationship Committee, constituted for transfer/ transmission of shares and allied matters, considers and approves the share transfers within the time limit stipulated by the Listing Agreement, subject to transfer instrument being valid and complete in all respects.
I. Dematerialisation of shares and liquidity:
ISIN Code- Equity Shares: INE 845 D01014
As on 31st March, 2015, 86.12% of the total Equity Shares of the Company have been dematerialised. Trading in Equity Shares of the Company is permitted only in dematerialised form w.e.f. 1st January, 2002 as per the notification issued by Securities and Exchange Board of India (SEBI).
J. Outstanding GDRs/ ADRs/ Warrants or any convertible instruments:
There were no outstanding GDRs/ ADRs as on 31st March, 2015. Compulsorily Convertible Preference Shares and Warrants:
During the year, the Company has allotted 31,07,500 Compulsorily Convertible Preference Shares of Rs.100/- each, convertible into 27,25,877 Equity Shares of Rs.10/- each of the Company at the price of Rs.114/- per Equity Share (including premium of Rs.104/- per share), on or before 2nd October, 2015.
During the year, 2,50,000 Warrants were issued convertible into equal number of Equity Shares of Rs.10/- each at a premium of Rs.104/- per share, at any time, in one or more tranches, on or before 2nd April, 2016.
As on 31st March, 2015, entire 31,07,500 Compulsorily Convertible Preference Shares and 2,50,000 Warrants were outstanding for conversion.
K. Plant Location:
1. Kanpur Unit:
Raipur (Rania), Kalpi Road, Distt. Kanpur Dehat.
2. Rudrapur Unit:
Plot No. 6, Sector -2, Integrated Industrial Estate, Pantnagar, Uttarakhand.
3. Bilaspur Units:
a) Khata No. 96 and 97, Arazi Village Kotha, Ali Nagar, Pargana and Tehsil Bilaspur, Distt. Rampur, U.P.
b) Gata No. 112, Village Temra, Tehsil Bilaspur, Distt. Rampur (U.P.)
L. Address for Correspondence:
With the Registrar and Transfer Agents:
Skyline Financial Services Pvt. Ltd.
D-153/A, First Floor,Okhla Industrial Area, Phase-I,New Delhi-110020
Tel: 011- 26812682-83,E-mail: firstname.lastname@example.org
With the Company:
The Company Secretary,
Ganesha Ecosphere Ltd. 113/216-B, First Floor, Swaroop Nagar, Kanpur- 208002.
Tel: 0512-2555504-06 Fax: 0512-2555293
E-mail: email@example.com firstname.lastname@example.org
M. Corporate Identification Number (CIN No.): L51109UP1987PLC009090 P. E-mail for Investors:
The Company has designated email@example.com as email address especially for investor grievance(s).
N. Code of Conduct:
The Company's Board has laid down a Code of Conduct for all Board Members and Senior Management Personnel of the Company. All Board members and designated senior management personnel have affirmed compliance with this Code of Conduct. A declaration to this effect, signed by Shri Shyam Sunder Sharmma, Chairman and Managing Director of the Company, is enclosed at the end of this report. Code of Conduct of the Company is available on the official website of the Company www.ganeshaecosphere.com
O. Adoption of Mandatory and Non-mandatory Requirements of Clause 49:
The Company has complied with all mandatory requirements of Clause 49 of the Listing Agreement. However, the Company has not adopted the non-mandatory requirements.
P. CEO and CFO Certification:
The Chairman and Managing Director and the Chief Financial Officer of the 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 the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Clause 41 of the Listing Agreement.
Q. Nomination Facility:
Shareholders holding Shares in physical form and desirous of making a nomination in respect of their Shareholding in the Company, as permitted under Section 72 of the Companies Act, 2013, may submit their request to the Company's Registrar and Transfer Agents, M/s. Skyline Financial Services Private Limited, in the prescribed Form SH-13 which will be sent by the Company upon such request.
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, I, Shyam Sunder Sharmma, Chairman and Managing Director of Ganesha Ecosphere Ltd., declare that all Board Members and Senior Management Personnel of the Company have affirmed their compliance with the Code of Conduct for the financial year 2014-15.
(Shyam Sunder Sharmma)
Chairman and Managing Director
Place : Kanpur
Date : 10th August, 2015