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Hiran Orgochem Ltd.

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Hiran Orgochem Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:

Your Company's.philosophy on Corporate Governance envisages attainment of highest level of integrity, fairness, transparency, equity and accountability in all facets of its functioning and in its interactions with shareholders, employees, government, regulatory bodies and the community at large. Your Company has been uploading fair and ethical business and corporate practices and transparency in its dealings. The Directors of the Company believe that good Corporate Governance improves Company's performance, enhances Corporate Social Responsibility and benefits all stakeholders. Accordingly, the Board has established a Corporate Governance framework to ensure that these intentions are met and that all stakeholders are informed about the affairs of the Company.

A. BOARD OF DIRECTORS:

(i) Board Composition:

The Board consists of 4 Directors having varied experience in different areas. The composition of the Board is in conformity with the provisions of Clause 49 of the Listing Agreement. Mr. Kantilal M. Hiran, Chairman & Managing Director of the Company, heads the Board. The Board consists of Two (2) Nonexecutive Independent Directors and One (1) non-executive director.

 (ii) Board Meetings and Attendance of Directors:

The Board meets at least once in a quarter to consider amongst other business, the performance of the company's quarterly financial results. When necessary, additional meetings are held. The Board meetings are generally held at the Registered Office of the Company at Mumbai. Notice and Agenda for each meeting along with explanatory notes are drafted and distributed well in advance to the Directors. Every Board Member is free to suggest the inclusion of items on the agenda.

During the financial year ended 31st March 2015, 7 (seven) Board meetings (excluding adjourned meeting) were held i.e. on 30th  May, 2014, 6th August, 2014, 14th  August, 2014, 1st September, 2014, 14th November, 2014, 31st January, 2015 and 13th  February, 2015 The maximum interval between any two meetings was well within the maximum allowed gap of four months.

The table hereunder gives the attendance record the Directors at the Board Meetings held during the financial period 1st  April, 2014 to 31st March 2015 and at the last Annual General Meeting:

Separate Board Meeting of independent Directors

As stipulated by the Code of Independent Directors under Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Separate meeting of the Independent Directors of the Company was held on 13th February, 2015 to review the performance of Non-independent Directors (Including Chairman) and the Board as a whole.

Agenda

All the meetings are conducted as per well designed and structured agenda. All the agenda items are backed by necessary supporting information and documents (except for critical price sensitive information, which is circulate in the meeting) to enable the Board to take informed decisions. Agenda also includes minutes of the meetings of the Board and Committees for the information of the Board. Agenda papers are circulated Seven days prior to the Board Meeting.

C. COMMITTEES OF THE BOARD:

The Board Committees play an important role in the governance structure of the Company and are being set out to deal with specific areas / activities which concern the company and need a closer review. The Board Committees are set up under the formal approval of the Board, to carry out the clearly defined role which is considered to be performed by the Members of the Board as a part of good governance practice. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes of the meetings of all the Committees are placed before the Board for their review.

The Board has established the following Committees:

Audit Committee:

As required under Section 177 of the Companies Act, 2013, read with the provisions of Clause 49 of the Listing Agreement, the Board has constituted an Audit Committee. It comprises of two (2) Non-

Executive Independent Directors and one (1) Executive Director. The Committee is headed by Mr. H. N. Bafna and comprises of Mr. Kantilal Hiran and Mr. H.N.Bafna.

The Audit Committee of the Company is entrusted with the responsibility to supervise the Company's internal control and financial reporting process and inter-alia performs the following functions:

a) Overseeing the Company's financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible;

b) Recommending the appointment, re-appointment and removal of the statutory Auditors, fixation of Audit fee and approval for payment of any other services;

c) Reviewing with management the Annual Financial Statements before submission to the Board;

d) Reviewing with the management, performance of statutory and internal auditors, adequacy of internal control systems;

e) Reviewing the adequacy of Cost Audit function;

f) Discussing with Auditors any significant findings and follow up on such issues;

g) Discussing with the internal auditors any significant findings and follow up there on;

h) Reviewing the Company's financial and risk management policies; and

i) Examining reasons for substantial default in the payment to Shareholders (in case of non-payment of declared dividends) and creditors, if any.

j) Any other matter duly specified under the applicable provisions of the Companies Act, 2013 read with Clause 49 of Listing Agreement.

Attendance of Members at the Audit Committee Meetings:

The meetings of the Audit Committee are also attended by the Statutory Auditors as special invitees.

During the financial period ended 31st March, 2015, 5 (Five) Audit Committee Meetings were held i.e. on 30th May, 2014, 14th August, 2014, 1" September,2014, 14th November,2014 and 13th  February 2015.

(II) Nomination & Remuneration Committee:

The Company has set up and renamed Remuneration Committee as Nomination and Remuneration Committee pursuant to Companies Act, 2013 . The Committee is consisting of two (2) Non-Executive Independent Directors and (1) Non-Executive Director. The Committee is headed by Mr. H. N. Bafna and comprises of Mr. Nitinn satyendra Gupta as its Member. The broad terms of reference of the 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.

Attendance of Members at the Remuneration Committee Meetings:

During the period ended 31st March 2015, one meeting was held on 31st January, 2015 to propose the appointment of Mrs. Dariyadevi Hiran as Additional Director of the Company.

Remuneration policy:

The Non-Executive Directors have informed the Company that they intend to forgo sitting fees as decided due to poor financial conditions. Consequently no sitting fee was paid to Non-Executive Directors for attending Board Meeting. The Chairman and Managing Director have also foregone his remuneration looking at the financial condition of the Company.

Presently, the company does not have any stock option plan or performance linked incentives for its Directors.

III) Shareholder's Grievance Committee:

The Company has set up a Shareholders/ Investors Grievance cum Share Transfer Committee consisting of Two (2) Non - executives Independent Directors. The Committee is headed by Mr. H.N. Bafna and Mr. Kailash Meetalal was a member who resigned from the directorship on 07* August, 2014 thereafter the committee was reconstituted and Mr. Nitinn Gupta was inducted as a Member.

The Committee is entrusted with the responsibility to address the Shareholders' and Investor's complaint with respect to transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc. and ensures expeditious Share Transfer Process. The Committee also evaluates

III) Shareholder's Grievance Committee:

The Company has set up a Shareholders/ Investors Grievance cum Share Transfer Committee consisting of Two (2) Non - executives Independent Directors. The Committee is headed by Mr. H.N. Bafna and Mr. Kailash Meetalal was a member who resigned from the directorship on 07* August, 2014 thereafter the committee was reconstituted and Mr. Nitinn Gupta was inducted as a Member.

The Committee is entrusted with the responsibility to address the Shareholders' and Investor's complaint with respect to transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc. and ensures expeditious Share Transfer Process. The Committee also evaluates performance and service standards of the Registrar and Share Transfer Agents of the company and also provides continuous guidance to improve the service levels of investors.

During the financial period ended 31st March, 2015,4 (Four) Shareholders/ Investors Grievance cum Share Transfer Committee Meetings were held i.e. on 30th may, 2014,14th August, 2014, 14th  November, 2014 and 13th  February 2015.

Details of Shareholders' complaints received, not solved and pending during the Financial Year ended 31 st March, 2015:

The total number of complaints received and replied to the satisfaction of the shareholders during the year ended 31" March, 2015 was all resolved. Hence there were no pending/ unattended complaints as on 31 "March 2015.

IV. Risk Management Committee:

The Company has set up a Risk Management Committee consisting of Two (2) Non - executives Independent Directors and One (1) Executive Director. The Committee is headed by Mr. Kantilal Hiran and Mr. Nitinfi Gupta and Mr. H. N. Bafna as Member of the Committee.

During the financial period ended 31" March, 2015, Committee has met once on 14th February, 2015.

Attendance of Members at the Risk Management Committee Meetings:

The table hereunder gives the attendance record of the members of the Committee:

D. DISCLOSURES:

a) Disclosure on material transactions i.e. transactions of the company of material nature with its Promoters, the Directors or the management, their subsidiaries or relatives etc., that may have potential conflict with the interest of the company at large.

None of the transactions with any of the related parties were in conflict with the interest of the company.

(b) Details of non-compliance by the company, penalties, strictures imposed by Stock Exchanges / SEBI or any statutory authority, on any matter related to capital markets, during the last three years: Company has been suspended w.e.f. 9th September, 2014 due to non-submission of Clause 55 for Dec 2013 and March, 2014 of listing agreement.

(c) The company has established requirement of Whistle Blower Policy. The policy is also posted on company" s website.

(d) The company has complied with the mandatory requirements of the Corporate Governance Clause of Listing Agreement.

E. CODE OF CONDUCT:

The Board of Directors has laid down the Code of Conduct for all the Board Members and Members of the senior Management. The code is also placed on the website of the Company viz . www.hiranorgochem.com . A Certificate from the Managing Director, affirming compliance of the said Code by all the Board members and Members of the senior Management, to whom the code is applicable, isannexed separately to this report

F. CERTIFICATE ON CORPORATE GOVERNANCE:

As required by Clause 49 of the Listing Agreement, a certificate issued by M/s. SVN & Associates, Practicing Company Secretaries, regarding compliance of conditions for Corporate Governance is given as an annexure to this report.

G. MANAGING DIRECTOR CERTIFICATION:

The Chairman & Managing Director of the Company have certified positively to the Board on the matters specified under Clause 49(V) of the Listing Agreement.

H. MEANS OF COMMUNICATION:

(i) The quarterly results of the company are published in newspapers in compliance with the provisions of Clause 41 of the Listing Agreement. Generally, the same are published in the Business Standards • (English language) and Navshakti (Marathi language^. As the results of the Company are published in the newspapers, half-yearly reports are not sent to each household of shareholders. The quarterly results as well proceedings of the Annual General Meeting are submitted to the BSE Limited immediately after the conclusion of the respective meeting.

(ii). No presentations were made to the institutional investors or to analysts during the year under review.

(iii) The Management Discussion and Analysis Report forms part of this Annual Report

I GENERAL SHAREHOLDERS INFORMATION:

a. Thirty First Annual General Meeting

Date 30th September, 2015

Time 10.00 a.m.

Venue Feast India Banquet,

Laxmi Palace, S.V.Road, Sundar Nagar, Malad - West, Mumbai -400,064

b. Financial Year

1st April, 2014 to 31st  March, 2015

c. Date of book closure

Tuesday, 22nd September, 2015 to Saturday, 30th September, 2015 (both days inclusive) for taking records of the Members of the Company for the purpose of AGM

d. Stock Code

506170

e. Demat ISIN No. forNSDL&CDSL

INE546E01016

J. REGISTRAR AND SHARE TRANSFER AGENTS:

Bigshare Services Pvt. Ltd.

E-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E), Mumbai - 400 072

Tel.: 022-4043 0200 Fax: 022-2847 5207

Email: info@bigshareonline.com   Website: www.bigshareonline.com   

K. SHARE TRANSFER SYSTEM:

All the share related work is being undertaken by our Registrar & Share Transfer Agent, Bigshare Services Private Limited. The Shareholders/Investors Grievance cum Share Transfer Committee has been constituted to approve the Share transfer, transmission, split, consolidation, etc. of shares. The Share transfers are registered and returned within 15 days from the date of receipt if the relevant documents are complete in all respects.

The total number of shares in physical form as on 31st March 2015 were 4,78,505 Equity Shares.

L. DEMATERIALIZATION OF SHARES AND LIQUIDITY:

The Company has established connectivity with Central Depository Services (India) Limited & National Securities Depositories Limited for dematerialization of shares and the same are available in electronic segment under (SIN No. INE546E01016. As on 31° March 2015, 9,81,78,355 Equity Shares representing 99.51 % had been dematerialized.

M. RECONCILIATION OF SHARE CAPITAL AUDIT REPORT:

As stipulated by the Securities and Exchange Board of India (SEBI), a qualified Practicing Company Secretary carries out the Reconciliation of Share Capital Audit, on a quarterly basis, to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Centra) Depository Services (India) Limited (CDSL) with the total listed and paid-up capital. The audit, inter alia, confirms that the total listed and paid up capital of the Company is in agreement with the aggregate of the total number of shares in dematerialized form and total number of shares in physical form.

N. FOR SHAREHOLDERS HOLDING SHARES IN DEMATERIALISED MODE:

Shareholders holding shares in dematerialized mode are requested to intimate all changes with respect to bank details, nomination, power of attorney, change of address, change of name, etc. to their depository participant (DP). These changes will be reflected in the company's records on the downloading of information from Depositories, which will help the company to provide better services to its shareholders.

O. OUTSTANDING GDR'S/ADR'S/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS. CONVERSION DATE AND LIKELY IMPACT ON EQUITY:

As on 31st March 2015,13136190  GDR's are outstanding for conversion.

P. NON MANDATORY REQUIREMENTS

The Board is taking guidance from the non mandatory requirements as mentioned in Corporate Governance. It is always an endeavor of the Board to implementthe suggestions of non mandatory requirement.

Q. PLANT LOCATION:

a. Plot No. 663, GIDC, Panoli, Ankleshwar, Gujarat- 394 116.

b. Plot No. 322/B GIDC, Panoli, Ankleshwar, Gujarat-394 116.

R. ADDRESS FOR CORRESPONDENCE:

Bigshare Services Pvt. Ltd.-

E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai- 400 072

Tel No.: 022-4043 0200 Fax No.: 022-28475207 Email: info@bigshareonline.com  Website: www.bigshareonline.com