CORPORATE GOVERNANCE REPORT
Corporate Governance is not merely the compliance of a set of regulatory laws and regulations but is a set of good and transparent practices that enable an organization to perform efficiently and ethically to generate long term wealth and create value for all its stakeholders. It goes beyond building and strengthening the trust and integrity of the Company by ensuring conformity with the globally accepted best governance practices. The Securities and Exchange Board of India (SEBI) observes keen vigilance over governance and fulfillment of these regulations in letter and spirit, which entails surety towards sustainable development of the Company, enhancing stakeholders' value eventually.
COMPANY'S PHILOSOPHY ON CORPORATEGOVERNANCE
At KANANI INDUSTRIES LIMITED, ('the Company'), the adherence to the Corporate Governance practices not only justifies the legal obedience of the laws but dwells deeper, conforming to the ethical leadership and stability. It is the sense of good governance that our leaders portray which trickles down to the wider management and is further maintained across the entire functioning of the Company. Your Company envisages the importance of building trust and integrity through transparent and accountable communication with the internal and external stakeholders as well as the customers of the Company. This involves keeping the stakeholders of the Company updated on a timely basis about the development, the plans and the performance of the Company with a view to establish the long term affiliations. The Company keeps itself abreast with the best governance practices on the global front, at the same time conforming to the recent amendments.
The Board of Directors fully supports and endorses the Corporate Governance practices in accordance with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges and the Voluntary Corporate Governance Guidelines to ensure good Corporate Governance practices across the Company in letter and in spirit. The Company has complied with all the mandatory requirements of the said clause and listed below is the status with regard to the same
BOARD OF DIRECTORS
The Board of Directors ("the Board") of your Company provides leadership and guidance to the Company's management and directs, supervises and controls the performance of the Company. The Board plays a crucial role of piloting the Company towards enhancement of the short and long term value interests of the stakeholders. The Board comprises of the members distinguished in various fields such as management, finance, law, marketing, technology and strategic planning. This provider's liability to the Company's functioning and the Board ensures article examination of the strategies and operational planning mechanisms adopted by the management across the globe.
The Company has an optimum combination of Directors on the Board and is in conformity with Clause 49 of the Listing Agreement. As on March 31, 2015, the Board comprised of 5 Directors out of which 3 are NonExecutive Independent Directors and 2 are Executive Directors.
Agenda papers of the Boards and its Committee meetings are circulated to the Directors well in advance of the meetings, supported with significant information including that as enumerated in Annexure X to Clause 49 of the Listing Agreement for an effective and well-informed decision making during the meetings.
The Board meets at regular intervals to discuss and decide on Company's business policy and strategy apart from other normal business. During the Financial Year 2014-2015, Six (6) Board Meetings were held on May 30, 2014, August 5, 2014, August 20, 2014, October 20, 2014, January 19, 2015&March 31, 2015. Time gap between any two meetings was not more than 120 days.
COMMITTEES OF BOARD OF DIRECTORSAUDIT COMMITTEE
The Audit Committee comprises of experts specializing in accounting / financial management. During the Financial Year 2014-15, Four (4) meetings of the Audit Committee were held on May 30 2014, August 5 2014, October 20 2014 and on January 19 2015. The time gap between any two meetings was not more than 4 months and the Company has complied with all the requirements as mentioned under the Listing Agreement and the Companies Act, 2013
The terms of reference of the Audit Committee were enlarged by the Board in order to cover the matters specified under revised Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013. This Committee has powers and roles comprising of Financial Reporting and disclosure, recommendation of appointment/removal of Auditors, reviewing of company's results, evaluation of Independent Directors performances, and all such and terms of reference as enumerated on the company's website at <http://> www.kananiindustries.com/pdf/AuditCommitteeCharter.pdf
NOMINATION AND REMUNERATION COMMITTEE
The Committee's constitution and terms of reference are in compliance with provisions of section 178 of the Companies Act, 2013, Clause 49 of the Listing Agreement and the Securities and Exchange Board of India (Share Based Employee Benefits Regulations, 2014, as amended from time to time.
The terms of reference of the Nomination & Remuneration Committee were enlarged by the Board in order to cover the matters specified under revised Clause 49 of the Listing Agreement and Section 178 of the Companies Act, 2013. This Committee has powers to recommend/ approve remuneration, Identification of Persons who are qualified to become director, Recommend to the board their appointment and removal, approve remuneration of Non-Executive Directors and all such and terms of reference as enumerated on the company's website at <http://www.kananiindustries.com/pdf/NominationandRemunerationPolicy.pdf> Remuneration Policy for Key Managerial Personnel and other Employees of the Company
The Company's Remuneration Policy for Key Managerial Personnel and Other employees is driven by the success and the performance of the Company and the individual & industry benchmarks and is decided by the Nomination and Remuneration Committee. Through its compensation programme, the Company endeavors to attract, retain, develop and motivate high performance workforce. The Company follows a mix of fixed/ variable pay, benefits and performance related pay. The Remuneration Policy for Key Managerial Personnel and Other employees of the Company is attached as Annexure I to the Directors' Report forming part of this Annual Report.
Remuneration of the Managing Director
The Remuneration Committee of the Board is authorized to decide the remuneration of the Managing Director ("MD") subject to the approval of the Members and the Central Government, if required. The details of remuneration of Mr. Harshil Kanani, MD for the year ended March 31, 2015 is as under:
@ Retirals include contribution to Provident Fund, but does not include provision for gratuity.
# Perquisites are inclusive of taxable value of perquisite on stock options exercised during the year.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Shareholders'/Investors' Grievance Committee was renamed as Stakeholders Relationship Committee and its terms of reference were enlarged by the Board to be in line with Section 178 of the Companies Act, 2013 and revised clause49 of the Listing Agreement. The Committee reviews Shareholder's / Investor' complaints like non-receipt of Annual Report, physical transfer / transmission / transposition, split / consolidation of share certificates, issue of duplicate share certificates etc. This Committee is also empowered to consider and resolve the grievance of other stakeholders of the Company including security holders.
The total numbers of complaints received during the year were NIL.
i. Related Party Transactions
The transactions with related parties as per Accounting Standard AS-18 are set out in Notes to accounts under Note no. 21 forming part of financial statements. All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm's length pricing basis. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosures as required by the relevant Accounting Standards (AS18) have been made in the Notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company's website at the link: <http://> www.kananiindustries.com/pdf/RelatedPartyTransactionPolicy.pdf
ii. Disclosures from Senior Management
In Compliance with Clause 49 (VIII) (D) (2) of the Listing Agreement, disclosures from Senior Management are obtained on quarterly basis to the effect that they have not entered into any material, financial and commercial transactions, where they have personal interest that may have potential conflict with the interest of the Company at large.
iii. Compliances by the Company
The Company has complied with the requirements of the Regulatory Authorities on matters related to the capital market and no penalties/ strictures have been imposed against the Company by the Stock Exchanges or SEBI or any other Regulatory Authority on any matter related to capital market during the last three years.
iv. Whistle Blower Policy/ Vigil Mechanism
The Company has adopted a Whistle Blower Policy to provide a vigil mechanism to directors, employees, agents, consultants, vendors and business partners to disclose instances of wrongdoing in the workplace. The object of this Whistle Blower Policy is to encourage individuals to disclose and protect such individuals in the event of a disclosure. The Company is keen on demonstrating the right values and ethical, moral and legal business practices in every field of activity within the scope of its work. The objective of this policy is to provide a vigil mechanism and framework to promote responsible whistleblowing and ensure effective remedial action and also protect the interest of the whistle blower as guided by legal principles. This policy is intended to:
a. Encourage and enable directors, employees, agents, consultants, vendors and business partners to raise issues or concerns, which are either unacceptable or patently against the stated objectives, law or ethics, within the Company.
b. Ensure that directors, employees, agents, consultants, vendors and business partners can raise issues or concerns without fear of victimization, subsequent discrimination or disadvantage thereof.
c. Reassure the whistle blower(s) that they will be protected from possible reprisals or victimization if they have made disclosure/s in good faith.
d. Ensure that where any wrong doing by the Company or any of its directors, employees, agents, consultants, vendors or business partners is identified and reported to the Company under this policy, it will be dealt with expeditiously and thoroughly investigated and remedied. The Company will further examine the means of ensuring how such wrong doing can be prevented in future and will take corrective action accordingly.
The policy also provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. No person has been denied access to the Audit Committee. All complaints received under the said policy are reviewed by the Audit Committee at its meeting held every quarter. In staying true to our values of Strength, Performance and Passion and in line with Company's vision of being one of the most respected companies in India; the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.
v. Corporate Social Responsibility Activities
In compliance with Section 135 of the Companies Act, 2013read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee, details of which are given earlier in this Report. An Annual Report on CSR Activities forms part of Directors' Report. The Company has also formulated Corporate Social Responsibility Policy and same is available at the website of the Company viz . <http://www.kananiindustries.com/pdf/> Corporate%20Sccial%20Responsibilty%20%20Policy.pdf
vi. CFO Certification
Certification on financial statements pursuant to Clause 49(V) of the Listing Agreement has been obtained from the CFO of the Company. Extract of the same is given at the end of this Report.
vii. Code of Conduct for Directors and Senior Management
The Board has laid down Codes of Conduct for Executive Directors & Senior Management and for Non-Executive/ Independent Directors of the Company. The Codes of Conduct have been circulated to the Board and Senior Management and the compliance of the same has been affirmed by them. A declaration signed by the CFO in this regard is given at the end of this Report. The Code of Conduct is available on website of the Company at the link <http://www.kananiindustries.com/pdf/> Code%20of%20Conduct%20Ethics.pdf
viii. Code of Conduct for Prohibition of Insider Trading
The Company has framed the Code of Conduct for Prohibition of Insider Trading' pursuant to the SEBI(Prohibition of Insider Trading) Regulations, 1992, as amended from time to time, which is applicable to its Directors, Officers, and Designated Employees. The Code includes provisions relating to disclosures, opening and closure of Trading Window and Pre-Clearance of trades procedure. In compliance with SEBI Regulations the Company sends intimations to Stock Exchanges from time to time.
ix. Subsidiary Companies
As on March 31, 2015, the Company has One (1) foreign subsidiary. The Company has no material non-listed Indian Subsidiary Company as defined in Clause 49(V) of the Listing Agreement. However, a policy on material subsidiaries has been formulated and the same is available on website of the Company at the link <http://www.kananiindustries.com/pdf/PolicyOnMaterialSubsidiaries.pdf> the consolidated financial statements of the Company and its subsidiaries are reviewed by the Audit Committee.
x. Risk Management & Internal Control
The Company has implemented a comprehensive 'Enterprise Risk Management' framework in order to anticipate, identify, measure, mitigate, monitor and report the risks to meet the strategic business objectives, details of which are given in the Risk Management section under 'Management Discussion and Analysis Report 'which forms part of this Annual Report. The Company has a competent in-House Internal Audit team which prepares and executes a vigorous Audit Plan covering various functions such as operations, finance, human resources, administration, legal and business development etc. across different geographies. The team presents their key audit findings of every quarter to the Audit Committee. The management updates the members about the remedial actions taken or proposed for the same. The suggestions and comments from the Committee members are vigilantly incorporated and executed by the Company.
xi. Sexual Harassment Policy
The Company has an anti-sexual harassment policy to promote a protective work environment. The complaints received by the Sexual Harassment Committee with details of action taken thereon are reviewed by the Audit Committee at its meeting held every quarter. The Company has a zero to clearance policy towards such complaints and the same is conveyed to the employees at the time of induction.
xii. Management Discussion and Analysis Report
The Management Discussion and Analysis Report forms part of this Annual Report.
xiii. Independent Directors
The Independent Directors of the Company have the option and freedom to meet and interact with the Company's Management as and when they deem it necessary. They are provided with necessary resources and support to enable them to analyze the information/data provided by the Management and help them to perform their role effectively.
xiv. Share Reconciliation Audit
As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchange. The Audit confirms that the total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form.
xv. Mandatory Requirements of Clause 49
The Company has complied with all applicable mandatory requirements of Clause 49 of the Listing Agreement.
xvi. MEANS OF COMMUNICATION
The announcement of quarterly and annual financial results to the Stock Exchanges is followed by media call and earnings conference calls. The quarterly and annual consolidated financial results are normally published in Business Standard (English) and Mumbai Lakhsyadeep (Marathi) newspapers. The following information is promptly uploaded on the Company's website viz. <http://www.kananiindustries.com/> investors.asp
• Standalone and consolidated financial results, investors' presentations, press release, fact sheet and transcript of earnings conference calls.
• Shareholding pattern (clause 35 of Listing Agreement) and Corporate Governance compliance reports (clause 49 of the Listing Agreement) filed with Stock Exchanges on a quarterly basis.
GENERAL SHAREHOLDER INFORMATION
i. Annual General Meeting
Day, Date & Time : Monday, 28th September, 2015 at 10.00 A.M
Venue : Krishna Palace Residency Hotel, 96/98, Grant Road, Mumbai - 400007
ii. Financial year : April 1 to March 31
Financial Calendar (Tentative) –
Financial Year 2015-2016:
1st Quarter : On or before 15th August, 2015
2nd Quarter : On or before 15th November, 2015
3rd Quarter : On or before 15th February, 2016
4th Quarter : On or before 30th May, 2016
Audited yearly result for the year : ended March 2016 - End of May 2016
iii. Dates of Book Closure (both days inclusive)
Monday, September 21, 2015 to Monday, September 28, 2015
In order to conserve the resources for the further growth of the Company, your Directors think fit not to recommend any dividend for the year under review.
v. Listing on Stock Exchanges and Payment of Listing Fees
The equity shares of the Company are listed on the BSE Limited (BSE) and NSE Limited (NSE). Annual Listing fees for the Financial Year 2015-2016 were paid by the Company to BSE and NSE in time.
vi. Custodian Fees to Depositories
The Company is in process to pay custodian fees for F.Y. 2015-2016 to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL
vii. (a) Stock Code / Symbol
BSE : 506184
NSE : KANANIIND
ISIN in (NSDL and CDSL) : INE879E01037
Corporate Identity Number (CIN) : L51900MH1983PLC029598
i. Registrar & Transfer Agent
Sharex Dynamic (India) Pvt. Ltd. Registrar & Share Transfer Agent Unit 1, Luthra Ind Premises, Safed Pool, Andheri Kurla Road, Andheri (East), Mumbai: 400072.
ii. Share Transfer System
The transfer of shares in physical form is generally processed by Registrar & Transfer Agent within a period of seven days from the date of receipt thereof, provided all the documents are in order. In case of shares in electronic form, the transfers are done by Depositories viz. NSDL and CDSL. In compliance with Clause 47(c) of the Listing Agreement, the Company obtains a certificate from a Practicing Company Secretary on a half-yearly basis confirming that all certificates have been issued within one month from the date of lodgment for transfer, sub-division, consolidation etc.
xvii. Dematerialization of Shares and Liquidity
Trading in the Company's shares is permitted only in dematerialized form. The Company has established connectivity with both the Depositories viz. CDSL through its Registrar & Share Transfer Agents, whereby the investors have the option to dematerialize their shares with either of the depositories. The Company obtains a certificate from a Practicing Company Secretary every quarter, which confirms that total issued capital of the Company is in agreement with total number of shares in dematerialized form with CDSL and shares in physical form.
xviii. Address for Correspondence
G/6, Prasad Chambers, Tata Road No.2, Opera House, Mumbai- 400004.
Dated: 6th August, 2015