CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the following is a report on the Corporate Governance code as implemented by the Company.
1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
It has been the endeavor of the Company to achieve a high level of transparency, accountability, independent monitoring and full disclosure within the framework of legal provisions. It is committed to enhance the shareholder's value over a sustained period of time and be accountable to its stake holders, employees, the government, financial institutions, bankers and lenders. Corporate Governance strengthens the Company's quest for higher growth and profitability. The Company believes that its systems and actions must be directed to enhancing corporate performance and maximizing shareholder value in the long term.
2. BOARD OF DIRECTORS
In terms of the Company's Corporate Governance policy, all statutory and other significant and material information is placed before the Board of Directors to enable it to discharge its responsibilities of supervision, control and direction of the Company as trustees of the shareholders. The Board, as part of its functioning, also periodically reviews its role.
The information placed before the Board includes, as applicable:
- Annual operating plans of Business, Capital budgets and any updates.
- Quarterly results of the Company and its operating division or business segments as applicable
- Minutes of Meeting of Audit Committee and other Committees of the Board as also resolutions passed by circulation.
- Appointment or resignation of Chief Financial Officer and Company Secretary.
- Show cause demand, prosecution and penalty notices which are materially significant
- Fatal or serious accident, dangerous occurrences, any material effluent or pollution problems.
- Any material default in financial obligations to and by the company including substantial non-payment for goods sold by the Company.
- Any issue which involves possible public or products liability claims of substantial nature, including any judgment or order which may have passed strictures on the conduct of the company or taken an adverse view, regarding another enterprise that can have negative implications on the company.
- Details of any joint venture or collaboration agreement.
- Transactions that involve substantial payment towards goodwill, brand equity or intellectual property.
- Significant labour problems and proposed solutions; any significant development in Human Resources / Industrial Relations front like signing of wages agreement, implementation of Voluntary Retirement Scheme etc.
- Sale of material nature of investments, subsidiaries, assets which is not in normal course of business.
- Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.
- Non-compliance of any regulations, statutory or listing requirements and shareholders services such as non-payment of declared dividend, delay in share transfer etc.
- Quarterly summary of all long-term borrowings made, bank guarantees issued, loans and investments made.
- Internal Audit findings and External Audit Management Reports (through the Audit Committee) .
- Status of business risk exposures in management and related action plans.
- Making of loans and investment of surplus funds.
- Proposal for investment, mergers and acquisitions.
- General notices of interest of Directors.
Composition of Board as on March 31, 2015
The composition of the Board of Directors of the Company, including the number of independent and non-executive directors, is in conformity with Clause 49 of the Listing Agreement entered into with the Stock Exchanges. The Board currently has not designated any director as Chairman.All the directors are non-executive and non-promoter. Meetings of the Board are chaired by one of the directors. None of the directors on the Board is a Member of more than 10 Committees or Chairman of more than 5 Committees, across all companies in which he is a director. Necessary disclosures regarding Committee positions in other public companies as on March 31, 2015 have been made by the directors. Ms. Savita Acharya (DIN:07038198) has joined the Board as an Independent Director from July 30, 2015. Brief resume of Directors as on date is given in the Annexure to this report.
3. BOARD COMMITTEES as on March 31, 2015
Currently, the Board has three Committees - Audit Committee, Stakeholders' Relationship Committee and Nomination and Remuneration Committee.
Terms of reference
(a) Primary objectives of the Audit Committee:
The Audit Committee acts as a link between the Statutory Auditors and the Board of Directors. It addresses itself to matters pertaining to adequacy of internal controls, reliability of financial statements and other management information and adequacy of provisions of liabilities. The primary objective of theAudit Committee (the "Committee") is to monitor and provide effective supervision of the management's financial reporting process with a view to ensure accurate, timely and proper disclosures and the transparency, integrity and quality of financial reporting.
The Committee oversees the work carried out in the financial reporting process by the management, including the independent auditor, and notes the process and safeguards employed by each.
(b) Scope of the Audit Committee:
3. Provide an open avenue of communication between the independent auditor and the Board of Directors
Recommending the appointment and removal of statutory auditors, fixation of audit fees and also to approve the payment for other services
Meet four times a year or more frequently as circumstances require. TheAudit Committee may ask members of management or others to attend meetings and provide pertinent information as necessary.
Confirm and assure the independence of the external auditor.
Review with independent auditor the co-ordination of audit efforts to assure completeness of coverage, reduction of redundant efforts and the effective use of all audit resources.
Consider and review with the independent auditor the adequacy of internal controls including the computerized information system controls and security;
Reviewing with the management, the quarterly financial statements before submission to the Board for approval
Reviewing with the management the annual financial statements before submission to the Board, focusing primarily on:
(a) Any changes in the accounting policies and practices
(b) The going concern assumption
(c) Compliance with accounting standards
(d) Compliance with stock exchange and legal requirements concerning financial statements
(e) Significant adjustment arising out of audit
Consider and review with the management and the independent auditor;
(a) Significant findings during the year, including the status of previous audit recommendations,
(b) Any difficulties encountered in the course of audit work including any restrictions on the scope of activities or access to required information.
Review of the following information:
(c) (i) Management discussion and analysis of financial condition and results of operations;
(ii) Statement of significant related party transactions submitted by the management;
(iii) Management letters/letters of internal control weaknesses issued by the Statutory Auditors
Composition of the Audit Committee as on March 31, 2015
The Audit Committee comprises of three Non-Executive Directors of which two are Independent Directors.
Mr. Sumit Jhunjhunwala, a Non-Executive Independent Director acts as the Chairman of the Committee. The Audit Committee is constituted in accordance with the Corporate Governance Code of the Listing Agreement and the provisions of the Companies Act, 2013. The statutory auditors are invited to the Audit Committee Meetings whenever required. The quorum for the Audit Committee Meeting is two members.
The composition of the Audit Committee as on March 31, 2015 is as under:
1. Shri Sumit Jhunjhunwala
2. Shri Hasmukh A. Patel
3. Shri R. P. Ganti
The Committee has recommended to the Board the appointment of M/s. Ramanlal G. Shah & Co., Chartered Accountants, as the statutory and independent auditors of the Company for the Financial Year ending March 31, 2016 and that necessary resolution for appointing them as auditors be placed before the shareholders.
Nomination and Remuneration Committee
The broad terms of reference of the Nomination and Remuneration Committee is to ensure that the remuneration practices of the Company in respect of the Senior Executives including the Executive Directors are competitive keeping in view prevalent compensation packages so as to recruit and retain suitable individual(s) in such capacity. Mr. Sumit Jhunjhunwala, Mr. H. A. Patel and Mr. R. P. Ganti are the members of the Committee. Mr. Jhunjhunwala acts as Chairman of the Committee.
The remuneration of the Directors is decided by the Board of Directors, keeping in view the provisions in the Articles of Association of the Company and the Companies Act, 2013. No Director of the company was paid any remuneration during the year. The Non Executive Independent Directors are paid sitting fees for attending Board and Committee meetings. No meeting of the Remuneration Committee was required to be held during the year
Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee had been formed as per the Corporate Governance Code prescribed in the Listing Agreement to review the status of investors' grievances, provide a mechanism for redressing such grievances and recommend measures to improve the level of investor services.
The said committee also acts as the Share Transfer Committee to specifically look into various issues of the Shareholders, issues of Duplicate Share Certificate, etc. This Committee has been delegated authority by the Board to approve transfer/transmission/ transposition of shares/debentures, issuance of share/debenture certificate etc. The Committee meets at such intervals as required to approve transfer/transmission/transposition of shares/debentures etc.
(i) Related Party Transactions:
During the year, Company has not entered into any sale / purchase transactions with its Associate Companies. Remuneration to Directors is disclosed in Clause 3 above.
(ii) Compliances by the Company:
There is no non-compliance by the Company or any strictures imposed by the Stock SEBI or any other statutory authority on any matter related to capital markets, during the last three years.
(iii) Access of personnel to the Audit Committee:
The Company's personnel have access to the Chairman of the Audit Committee in cases such as concerns about unethical behavior, frauds and other grievances. No personnel of the Company have been denied access to the Audit Committee.
6. CERTIFICATE ON CORPORATE GOVERNANCE:
The Company has obtained a Certificate from the statutory auditors regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 which is annexed herewith.
7. CEO DECLARATION:
As required by clause 49 of the Listing Agreement, Director's declaration on compliance of the Company's Code of Conduct is annexed herewith.
SHAREHOLDERS' GENERAL INFORMATION
Date, time and venue of 19th September, 2015, 11:30 A.M.
Annual General Meeting of Shareholders BPC Convention Centre, Productivity Road, Baroda-390007
(ii) Financial Calendar 2051—2016 Financial reporting for quarter ended (tentative and subject to change) June 30, 2015 : By August, 14, 2015
September 30, 2015 : By November 15, 2015
December 31, 2015 : By February 15, 2016
March 31, 2016 : Audited results within 60 days from end of quarter:
Annual General Meeting for year ended31st March 2016– By September 30, 2016
iii) Dates of book closures As mentioned in the notice of the AGM.
(iv) Dividend Payment The Company has not declared any dividend
(v) Registered Office 6th Floor, Offtel Towers, R. C. Dutt Road, Baroda –390 007 Tel Nos.: 0265-2336468
(vi) Listing on Stock Exchange BSE Limited; Vadodara Stock Exchange
(vii) Stock Exchange Code BSE – 506457; VSE – 0118
(viii) Demat ISIN for NSDL / CDSL INE 462C01010
(ix) Share Transfer Agent In view of Common Agency requirement by SEBI, Company has appointed Link Intime India Pvt. Ltd, B-102, & 103, Shangrila Complex, First Floor, opp. HDFC Bank , Near Radhakrishna Char Rasta , Akota, Vadodara- 390 020 as Share Transfer Agents
12. Dematerialistion of Shares
74.56 % of the shares have been dematerialized up to 31st March, 2015.
13. Plant Location
Plant has been disposed of in earlier year
14. ADDRESS For Correspondence BY SHAREHOLDERS
Link Intime India Pvt. Ltd, B-102, & 103, Shangrila Complex, First Floor, Opp. HDFC Bank , Near Radhakrishna Char Rasta , Akota, Vadodara- 390 020