REPORT ON CORPORATE GOVERNANCE
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Your Company has been upholding the core values in all facets of its corporate working, with due concern for the welfare of shareholders of the Company. The Management has consistently followed the principles of Corporate Governance, based on fairness, transparency, integrity, accountability and the compliance with laws in all corporate decisions.
2. BOARD OF DIRECTORS
* Excludes alternate directorships and directorships in foreign companies and private companies and Companies u/s.8 of the Companies Act, 2013.
# Excludes Committees other than Audit Committee, Stakeholders Relationship Committee of Public Limited Companies.
The Non-Executive Independent Directors fulfill the conditions of independence specified in Section 149(6) of the Companies Act, 2013 and Rules made there under and meet with requirement of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. As required by the Companies Act, 2013 and the Listing Agreement, a formal letter of appointment has been issued to the Independent Directors. The terms and conditions of appointment have been disclosed on the website of the Company viz. www. iitlgroup.com.
Board Meetings and Annual General Meeting
The meetings of the Board are scheduled well in advance. The Board meets at least once in a quarter inter alia to review the performance of the Company. For each meeting, a detailed agenda is prepared in consultation with the Chairman.
During the year 2014-2015, 6 Board Meetings were held i.e., on April 03, 2014, May 20, 2014, July 25, 2014, November 08, 2014, February 04, 2015 and March 30, 2015.
3. FAMILIARISATION PROGRAMME
The Company has formulated a Familiarisation Programme for Independent Directors with an aim to 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., to provide them with better understanding of the business and operations of the Company and so as to enable them to contribute significantly to the Company.
The Company shall conduct periodical meetings and make presentations to familiarize Independent Directors with the strategy, operations and functions of the Company.
The details of familiarisation programme have been disclosed on the website of the Company under the web link <http://www>. iitlgroup.com/newStatic/AboutUs.aspx.
4. GOVERNANCE CODES Code of Conduct
As required by Clause 49 of the Listing Agreement, the Board of Directors of the Company have adopted a Code of Conduct for all Board members and Senior Management of the Company. The members of the Board of Directors and Senior Management have affirmed compliance of the said Code during the period under review. A declaration to this effect signed by the Chairman of the Company is given elsewhere in the Annual Report.
The full text of the Code is disclosed on the Company's website www.iitlgroup.com
Code of Conduct for Prohibition of Insider Trading
The Company has adopted a Code of Conduct for Prevention of Insider Trading in accordance with the requirements of Securities and Exchange Board of India (SEBI) (Prohibition of Insider Trading) Regulations, 1992. The Code is amended from time to time reflecting the changes brought in by SEBI in the Insider Trading Regulations. The Code is applicable to Promoters and Promoter group, all Directors and such Designated Employees who are expected to have access to the Unpublished Price Sensitive Information relating to the Company. The Company Secretary is a Compliance Officer for monitoring adherence to the said Regulations.
5. COMMITTEES OF THE BOARD
The Board has constituted the following Committees of Directors:
a) Audit Committee:
The Audit Committee was constituted on March 14, 2001. It was last reconstituted on January 28, 2013. The Committee is entrusted with the responsibility to supervise the Company's internal controls and financial reporting process. The composition, quorum, powers, role and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of the Clause 49 of the Listing Agreement.
During the year under review, four meetings of the Audit Committee were held, the dates being May 20, 2014, July 25, 2014, November 08, 2014 and February 04, 2015.
Mr. Subhash C. Bhargava, the Chairman of Audit Committee was present at the Annual General Meeting held on August 30, 2014.
The representatives of Statutory Auditors are permanent invitees to the Audit Committee Meetings. They have attended all the Audit Committee meetings during the year.
Ms. Cumi Banerjee, CEO & Company Secretary acts as Secretary to the Committee and attends the meetings.
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 auditors of the company;
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4. Reviewing and examination, 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 subsection 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. 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 utilisation 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 (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
20. Carrying out any other function as prescribed by the Board of Directors from time to time.
b) Nomination and Remuneration Committee:
In line with the Companies Act, 2013 / Clause 49 of the Listing Agreement requirements, the nomenclature of Remuneration Committee has been changed to Nomination and Remuneration Committee. The Committee was last reconstituted on May 20, 2014.
During the year under review, two meetings of the Nomination and Remuneration Committee were held on July 25, 2014 and March 30, 2015. become Directors and who may be appointed in Senior Management in accordance with the criteria laid down, recommendation to the Board about their appointment and removal and carrying out evaluation of every Director's performance;
b. Formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommendation to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees;
c. Formulate a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees and while formulating the policy the Committee to ensure that the:
i. Level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
ii. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
iii. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals.
d. In cases where any services rendered by a Director are of a professional nature to opine whether the Director possesses the requisite qualification for the practice of the profession;
e. Approve the payment of remuneration of Managing Director or Whole-time Director or a Manager (Managerial Person) for the purposes of Section II (dealing with remuneration payable by companies having no profit or inadequate profit without Central Government approval) of Part II of the Schedule V (under sections 196 and 197) of the Companies Act, 2013.
f. to look into the entire gamut of remuneration package for the working Director(s) and revise their remuneration suitably within the limits prescribed under the Companies Act, 2013 or any rules or amendments thereto, with power to consider fixing/ re-fixing salaries, perquisites and other terms of remuneration of the working Director(s) of the Company subject to approval of shareholders, where necessary;
g. to decide on the commission payable to the Directors within the prescribed limit and as approved by the shareholders of the Company;
h. to attend to such other matters and functions as may be prescribed from time to time.
The Nomination and Remuneration Policy is annexed at 36 I-
c) Stakeholders Relationship Committee (SRC)
The Board had constituted Share Transfer & Shareholders'/Investors' Grievance Committee on January 16, 2002. The Committee was last reconstituted on January 28, 2013.
In line with the Companies Act, 2013 / Clause 49 of the Listing Agreement requirements, the nomenclature of Share Transfer & Shareholders'/Investors' Grievance Committee has been changed to Stakeholders Relationship Committee (SRC).
The Committee as on March 31, 2015 comprises of 3 members, namely:
Mr. R.S. Loona - Non Executive Director - Chairman Dr. B. Samal - Member Mr. P.K. Rath - Member
(1) approves and monitors transfers, transmissions, splitting and consolidation of shares and the issue of duplicate share certificates; and
(2) looks into various issues relating to shareholders, including redressing of complaints received from shareholders, relating to transfer of shares, non-receipt of balance sheets, dividends etc.
To expedite share transfer process, the Board has authorised the CEO & Company Secretary of the Company to approve share transfer / transmissions up to one thousand shares. Share transfers for more than one thousand shares are approved by the SRC. During the year, 7 meetings were held. Transfer formalities have been attended at least once in a fortnight.
- Name and designation Ms. Cumi Banerjee of Compliance Officer: CEO & Company Secretary
- No. of shareholders 17 complaints received
- No. of Shareholders 17 complaints resolved
- No. of complaints not Nil resolved to the satisfaction of the shareholders
- Pending complaints Nil as on 31.03.2015
The Company attends to investors' & shareholders' grievances within 15 days from the date of its receipt.
d) Committee for Investments / Loans and Risk Management
The Board had constituted 'Committee of Directors' on March 05, 2008 to deal with matters concerning investments and granting loans. On July 20, 2010, the nomenclature of Committee of Directors was changed to 'Committee for Investment and Loans'.
The Board had constituted a Risk Management Committee on June 02, 2006.
The Board of Directors in their meeting held on August 01, 2013, decided that a new Committee by the name 'Committee for Investments / Loans and Risk Management' be constituted in place of 'Committee for Investments and Loans' and 'Risk Management Committee' which would deal with matters concerning investments, granting loans, taking / providing guarantees / securities and address all risks which can create impact on the business of the Company.
The Committee as on March 31, 2015 consisted of 4 members, namely:
Mr. Subhash C. Bhargava - Chairman Dr. B. Samal - Member
Mr. Bipin Agarwal - Member
Mr. R.S. Loona - Member
During the year under review, four meetings of Committee for Investments / Loans and Risk Management were held on October 16, 2014, November 07, 2014, February 04, 2015 and March 30, 2015.
e) Asset Liability Management Committee
The Board has constituted 'Asset Liability Management Committee' (ALCO) on August 01, 2013 consisting of senior management executives which monitors liquidity and interest rate risks of the Company. The functioning of ALCO is reviewed by the Committee for Investments / Loans and Risk Management which meets on quarterly basis and reports to the Board of Directors.
During the year under review, the Asset Liability Management Committee met thrice on May 19, 2014, December 10, 2014 and March 25, 2015.
f) Corporate Social Responsibility Committee (CSR)
Pursuant to Section 135 of the Companies Act, 2013, the Corporate Social Responsibility (CSR) Committee was constituted on May 20, 2014.
The Committee as on March 31, 2015 comprises of 3 Directors out of which one Director is an Independent Director:
Dr. B. Samal Chairman
Mr. Bipin Agarwal Member
Mr. Venkatesan Narayanan - Member
During the year under review, one meeting of Corporate Social Responsibility Committee was held on November 07, 2014.
The Company has formulated CSR Policy, which is uploaded on the Website of the Company (Weblink; <http://iitlgroup.com/newStatic/AboutUs.aspx>).
5. COMPLIANCE WITH OTHER MANDATORY REQUIREMENTS
a) Management Discussion and Analysis
A Management Discussion and Analysis Report forms part of the Annual Report and includes discussions on various matters specified under clause 49(VIII) (D) of the Listing Agreement.
b) Separate Meeting of Independent Directors
During the year under review, the Independent Directors met on March 30, 2015, inter alia, to discuss:
i) Evaluation of performance of Non-Independent Directors and the Board of Directors as a whole;
ii) Evaluation of performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors;
iii) Evaluation of the quality, content and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
c) Performance evaluation of independent directors:
The Nomination and Remuneration Committee of the Board laid down the evaluation criteria for performance of all its Directors including the Independent Directors. The performance evaluation of the Independent Directors has been done by the entire Board of Directors, except the Director concerned being evaluated. The criteria for performance evaluation of the Independent Directors are as follows:
• Attendance and participations in the Meetings and timely inputs on the minutes of the meetings
• Adherence to ethical standards & code of conduct of Company and disclosure of non - independence, as and when it exists and disclosure of interest
• Raising of valid concerns to the Board and constructive contribution to resolution of issues at meetings
• Interpersonal relations with other directors and management
• Objective evaluation of Board's performance, rendering independent, unbiased opinion
• Understanding of the Company and the external environment in which it operates and contribution to strategic direction
• Safeguarding interest of whistle-blowers under vigil mechanism and Safeguard of confidential information
d) Subsidiary Companies
Under Clause 49 of the Listing Agreement, an Independent Director of the Company is required to be appointed as Director on the Board of the material unlisted Indian subsidiaries.
The following Independent Directors have been appointed as an Additional Director/ Director on the Board of the unlisted subsidiary company:
1. Mr. Venkatesan Narayanan - IIT Insurance Broking and Risk Management Private Limited (non-material unlisted subsidiary) w.e.f. February 04, 2015;
2. Mr. R.S. Loona has been appointed as Director of IITL Marketing Management Private Limited (non-material unlisted subsidiary) w.e.f. January 27, 2010;
3. Mr. Venkatesan Narayanan - IITL Corporate Insurance Services Private Limited (non-material unlisted subsidiary) w.e.f. January 31, 2014; and
4. Mr. Venkatesan Narayanan - IIT Investrust Limited (non-material unlisted subsidiary) w.e.f. May 13, 2013.
The Audit Committee of the Company reviews the financial statements, including the investments made, of its unlisted subsidiaries.
The Minutes of the meetings of the Board of Directors 38 I- of the unlisted subsidiary companies are regularly placed before the Board of Directors of the Company. A statement containing the significant transactions and arrangements entered into by the unlisted subsidiaries are periodically placed before the Board of Directors of the Company.
The Company has formulated a Policy for determining material subsidiaries. The policy is available on the website of the Company. (Weblink: <http://www.iitlgroup>. com/newStatic/AboutUs.aspx).
e) Disclosures - Related Party transactions
Statements in summary form of transactions with related parties are periodically placed before the Audit Committee.
As required under Clause 49 of the Listing Agreement, the Company had formulated the policy on dealing with Related Party Transactions. The policy is available on the website of the Company. (Weblink: <http://www.iitlgroup>. com/newStatic/AboutUs.aspx).
f) Vigil Mechanism/ Whistle Blower Policy
As required by Companies Act, 2013 and Clause 49 of the Listing Agreement, your Company has formulated a Vigil Mechanism/ Whistle Blower Policy to maintain the standard of ethical, moral and legal conduct of business operations. A Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman/ CEO/ Chairman of the Audit Committee in exceptional cases.
Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.
The Whistle Blower Policy has been disclosed on the Company's website under the web link <http://www>. iitlgroup.com/newStatic/AboutUs.aspx and circulated to all the Directors and employees.
g) Disclosure of Accounting Treatment
In the preparation of financial statements, the Company has followed the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
h) Disclosure on Risk Management
The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. The Board periodically reviews the same.
i) CEO / CFO Certification
In terms of the requirements of Clause 49 (IX) of the Listing Agreement, the Executive Chairman, Dr. B. Samal and CEO & Company Secretary, Ms. Cumi Banerjee have submitted necessary certificate to the Board of Directors stating the particulars specified under the said clause.
This certificate has been reviewed and taken on record by the Board of Directors at its meeting held on May 30, 2015.
The Company is in the process of appointing Chief Financial Officer.
j) Non-mandatory requirements
Besides complying with mandatory requirements of the Listing Agreement, the Company has also complied with the following Non-mandatory requirements of Listing Agreement.
i) Audit Qualifications
The Company continues to remain in the regime of unqualified financial statements and submits Form A for Unqualified Auditors Report along with its Annual Report to the Stock Exchanges.
ii) Separate posts of Chairman and Chief Executive Officer (CEO)
Separate persons have been appointed as Chairman and Chief Executive Officer of the Company.
7. OTHER DISCLOSURES
a) There were no materially significant transactions with the related parties during the year, which had or could have potential conflict with the interests of the Company at large. Transactions with the related parties are disclosed in Note 2.24 of the Financial Statements in the Annual Report.
b) No penalties or strictures have been imposed on the Company by SEBI, Stock Exchanges or any other statutory authority, for non-compliance of any laws, on any matter related to the capital markets, during the last three years.
c) There are no inter-se relationships between Directors of the Company.
8. MEANS OF COMMUNICATIONS
a) Quarterly and Annual financial results of the Company are forwarded to the BSE Limited and The National Stock Exchange of India Limited and published in Free Press Journal (English) and Navshakti (Marathi). Half yearly report is not sent to each shareholder. However, the results of the Company are published in the Newspapers.
b) The Company has not made any presentation to any institutional investors or to any analysts during the year.
c) Management Discussion and Analysis Report forms part of the Directors' Report.
d) The Company has launched its website www.iitlgroup com. Annual Report of the Company shall be available on the website in a user friendly and downloadable form. The quarterly / half yearly results are also available on the Company's website.
9. GENERAL SHAREHOLDER INFORMATION
Annual General Meeting
Date & Time : Wednesday, September 16, 2015 at 2:30 p.m.
Venue : M.C. Ghia Hall, 4th Floor, Bhogilal Hargovindas Building, 18/20 K. Dubash Marg, Mumbai 400 001.
Financial Calendar : 2015-2016 Adoption of Quarterly
Dividend Payment Date : On or before October 16, 2015
Book Closure period : September 09, 2015 to September 16, 2015
Listing on Stock : BSE Limited (BSE),
Exchange Dalal Street, Mumbai 400001
The National Stock Exchange of India Limited (NSE) BKC, Bandra (E), Mumbai 400051
Listing fees, as prescribed, have been paid to the BSE and NSE up to March 31, 2016.
f) Stock Code at BSE : 501295
NSE Stock Symbol : IITL
i) Registrar and Transfer Agents
Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400 078. Tel. No.: 022 2596 3838
j) Share Transfer System
The transfer of shares held in physical mode is processed by Link Intime India Private Limited and is approved by the Stakeholders Relationship Committee / CEO & Company Secretary of the Company as the case may be. The transfer of shares is effected and share certificates are dispatched within a period of 30 days from the date of receipt, provided that the relevant documents are complete in all respects.
The Company has entered into agreements with National Security Depository Limited and Central Depository Services Limited for the dematerialisation of shares. As on March 31, 2015, a total of 21,698,149 shares, which forms 96.23% of the share capital of the Company stands dematerialized and 849,401 shares which forms 3.77% of the share capital are in physical form.
m) Outstanding GDRs / ADRs / Warrants or any convertible instruments
(a) On June 15, 2012, the Company had issued 4,888,775 Global Depositary Receipts (GDRs), each GDR representing two Equity Shares of Rs.10/- each. The GDRs issued by the Company are listed on the Luxembourg Stock Exchange. As on March 31, 2015, the total outstanding GDRs stood at 4,888,775.
(b) The Company has converted the balance 720,000, 10% Compulsorily Convertible Preference Shares (CCPS) of Rs.10/- each issued and allotted on preferential basis to the promoters on April 3, 2014, namely N. N. Financial Services Private Limited and Nimbus India Limited. The Equity Shares issued and allotted as above are listed on BSE Limited and The National Stock Exchange of India Limited and have been admitted to dealings on both the Stock Exchanges.
n) Plant Location
The Company does not have a manufacturing plant.
o) Address for Correspondence
Shareholders can correspond with the Registrars & Share Transfer Agents or at the Registered Office of the Company.
Address of the Registrar & Share Transfer Agents
Link Intime India Private Limited C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West), Mumbai 400 078. Tel. No.: 022 2596 3838
For the convenience of the investors, transfer requests are also accepted at the Registered Office of the Company.
Address of Registered Office
14 E Rajabahadur Mansion, 2nd Floor 28, Bombay Samachar Marg, Fort, Mumbai - 400 001
Ms. Cumi Banerjee - CEO & Company Secretary Tel. No.: 022 4325 0100
Auditors' Certificate on Corporate Governance
The Auditors' Certificate on compliance of Clause 49 of the Listing Agreement relating to Corporate Governance is published as an annexure to the Directors' Report.
Declaration on Compliance with Code of Conduct
It is hereby affirmed that all the directors and the senior management personnel have complied with the Code of Conduct framed by the Company and a confirmation to that effect has been obtained from the directors and senior management.
On behalf of the Board of Directors
Dr. B. Samal
Chairman (DIN: 00007256)
Place : Mumbai
Date: August 04, 2015