REPORT ON CORPORATE GOVERNANCE
1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
Compliance with the code of Corporate Governance forms an integral part of the Company. At Lyka Labs Limited, Corporate Governance is all about maintaining a valuable relationship & trust with all stakeholders and to carry out Company's activities and operation in a true and fair manner to achieve transparency, accountability and business prosperity. We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance as well as the leadership and governance of the Company.
As per Clause 49 of the Listing Agreement and applicable provisions of the Companies Act, 2013, a report on Corporate Governance is detailed below:
2. BOARD OF DIRECTORS
2.2 Board Meeting Attendance
i) As on June 30th 2015, The Board comprised of 5 (Five) Directors, viz., the Chairman & Managing Director and 1 (One) Non Executive and 3 (Three) Independent Directo The Board met 9 (Nine) times during the year under review viz., 14th July, 2014, 16th August, 2014, 28th August, 2014, 13th November, 2014, 24th December, 2014, 14th February, 2015, 24th February, 2015, 24th April, 2015 and 15th May, 2015.
2.3 Separate Meeting of Independent Directors
During the financial year under review, the meeting of Independent Directors held on 15th May, 2015,:-
i) To review the financial difficulties and fund requirements of the Company
ii) To discuss about outstanding liabilities and various avenues to improve financials of the Company Shri Vinod S. Shanbhag and Shri Yatin N. Shah attended the meeting.
2.4 Familiarization Programme for Independent Directors
As and when a new Independent Director is appointed, the Company takes steps to familiarize the Independent Directors with the Company, his/her roles, rights and reviewing and evaluating their performance and compliances of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement and other relevant regulations.
2.5 Compliance with Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct & Ethics. The same is posted on the Company's website i.e: www.lykalabs.com All Board members and Senior Management Personnel are adhering compliance with the said code in the best possible manner for the year ended 30th June, 2015. A declaration to this effect signed by the Chairman & Managing Director is given below:
3. AUDIT COMMITTEE
3.1 Brief Description
The terms of reference of the Audit Committee is as set out in Clause 49 of the Listing Agreement with the Stock Exchanges read with Section 177 of the Companies Act, 2013. The primary objective of the Committee is to monitor and provide an effective supervision of the financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.
3.2 Composition of Committee
The Committee comprises of Three Directors The said Committee works under the Chairmanship of Shri Vinod S. Shanbhag. Shri Yatin N. Shah and Shri Narendra I. Gandhi are members of the Committee.
The Audit Committee met on 14th July, 2014, 28th August, 2014, 13th November, 2014, 24th December, 2014, 14th February, 2015, 24th February, 2015 and 15th May, 2015.
3.4 Terms of reference and Role of Audit Committee
The scope and role of Audit Committee is in accordance with the Companies Act, 2013 and the Listing Agreement entered into with the Stock Exchanges which includes but not limited to the following:
i) Review of the Annual and Quarterly Financial Statements.
ii) Oversee the company's financial reporting process and the disclosure of its financial information and ensure that the financial statement is correct, sufficient and credible.
iii) Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor, branch auditors and cost auditors.
iv) Review of the Accounting Policies and Accounting Standards applied in preparation of Financial Statements.
v) Review of Notes to the Financial Statements.
vi) Review of Internal Auditors Report on quarterly basis and Limited Review Report of Auditors on Quarterly Financial Statements (Standalone and Consolidated) and Statutory Audit Report on Annual Accounts.
vii) Review of Disclosure of Related Party Transactions.
viii) Review and suggest explanations to the qualifications made in Audit Report.
ix) Recommend appointment of Chief Financial Officer.
x) Recommend changes if any in Accounting Policies, practices and reasons for the same.
xi) Recommend for sale of fixed assets of the Company if necessary, for reinforcement of fund requirements of the Company.
xii) Review of status of outstanding fixed deposits and debentures and to recommend payment thereof.
xiii) Review of status of outstanding statutory dues and employees dues and to recommend payment thereof.
xiv) Review of financial affairs of the Company
3.5 Powers of Audit Committee
The Audit Committee powers includes the following:
1. To investigate any activity within its terms of reference;
2. To seek information from any employee;
3. To obtain outside legal or other professional advice, if necessary;
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
3.6 Review of information by Audit Committee
The Audit Committee reviews the following information:
1. Analysis of financial condition and results of operations;
2. Statement of related party transactions;
3. Management letters, if any, issued by the statutory auditors;
4. Quarterly Internal audit reports issued by the internal auditors.
4. NOMINATION AND REMUNERATION COMMITTEE
i) Brief Description
In terms of Section 178 of the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges, the Committee identifies and recommends the appointment of person as Directors/Independent Directors based on certain criteria as laid down in the Nomination and Remuneration policy. The said Committee met on 28th August, 2014 and 14th February, 2015.
ii) Composition of Committee:
The Committee comprises of 3 (Three) Directors. The said Committee works under the Chairmanship of Shri Vinod S. Shanbhag. Smt. Nehal N. Gandhi and Shri Yatin N. Shah the members of the Committee.
iv) Remuneration Policy
In terms of Section 178 of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Remuneration policy for the Board of Directors and Senior Management Personnel is determined and formulated by the Board. This policy shall act as a guideline for determining, inter-alia, qualifications, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel, Senior Management and other employees.
5. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Committee reviews Stakeholders' /Investors grievances and their resolution and also reviews the Share Transfers. The Committee held 4 meetings during the financial year namely 2nd July, 2014, 1st October, 2014, 4th January, 2015 & 3rd April, 2015.
During the year under review, no complainant was received from shareholders. The Company has acted upon valid requests for share transfers received during the year and no such request is pending. The resolution of the complaints received from Debenture holders and deposit holders are under process.
i) Disclosure on Materially Related Party Transactions:
The Company has formulated a policy on materiality of related party transactions and also on dealing with related party transactions. This policy is available on the website of the Company. During the year 2014-15, no materially significant related party transactions have been entered into by the Company with the Promoters, Directors or Management or their relatives, that may have a potential conflict with the interest of the Company. Details of all related party transactions are disclosed in the Notes to the Accounts in the Annual Report as required under Accounting Standard-18 issued by the Institute of Chartered Accountants of India. The transactions with the companies, where the Directors of the Company were interested, were in the ordinary course of business, at arm's length and such transactions did not have any potential conflict with the interests of the Company. All related party transactions were done with prior omnibus approval of the Audit Committee. Register under Section 189 of the Companies Act, 2013 is maintained and particulars of transactions are entered in the Register, wherever applicable. The interested Directors neither participate in the discussion, nor vote on such matters, when such matters come up for approval.
ii) Details of non compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.
The penalty of Rs. 75,000/- is levied respectively by BSE & NSE for delay in compliance of clause 41 of the listing agreement with the stock exchange for the quarter ended 31st March, 2014 which has been paid.
iii) Whistle Blower Policy
The Company has adopted a Whistle Blower Policy and has established the necessary mechanism in line with the requirements under the Companies Act, 2013 and Listing Agreement with the Stock Exchanges.
(a) For employees to report concerns about unethical behavior;
(b) To establish a mechanism to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the Integrity Policy; and
(c) To ensure that adequate safeguards shall be provided to the whistle blowers against any victimization or vindictive practices like retaliation, threat or any adverse (direct or indirect) action on their employment. The Policy also ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.
No personnel/person has been denied access to the Audit Committee.
The Chairman of the Audit Committee looks into the complaints raised by employees and affected Directors and reports to the Board for resolution of the complaints on time.
iv) Code of Conduct
The Company has adopted Code of Conduct for Directors and Senior Management Officials of the Company.
v) Code of Conduct for prevention of Insider Trading
The Company has adopted Code of Conduct for prevention of Insider Trading which is available on Company's website.
8. MEANS OF COMMUNICATION:
i) Quarterly Results:
The quarterly/half yearly /annual/unaudited and audited financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board of Directors. The quarterly, half yearly and annual financial results are published in English & Marathi daily newspaper in Mumbai and Gujarati daily newspaper in Surat. The same were uploaded on the Company's website i.e. www.lykalabs.com
ii) Green Initiative:
In support of the "Green Initiative" undertaken by Ministry of Corporate Affairs, the Company for the financial year 2014-15 will send Annual Report to those members whose email id which are registered with the Registrar & Share Transfer Agent. Physical copies are sent to those members whose email addresses are not registered with the Registrar & Share Transfer Agent.
9. GENERAL SHAREHOLDER INFORMATION
The Thirty Sixth Annual General Meeting (AGM) of the Company for the financial year 2014-2015 is scheduled on Wednesday, 30th December, 2015 at 12.45 p.m. at 4801/B & 4802/A. G.I.D.C industrial Estate, Ankleshwar-393002.
In compliance with the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 and Clause 35B of the Listing Agreement with the Stock Exchanges (NSE & BSE), the Company has also extended e-voting facility, for its Members to enable them to cast their votes electronically on the proposed resolutions as mentioned in the Notice of the Thirty Sixth AGM. Instructions for e-voting are listed under the segment "Notes" in the Notice to Thirty Sixth AGM.
Those Shareholders/Members, who cannot attend the AGM in person, can appoint a proxy to represent them in the AGM, for which the Shareholder/Member needs to fill in a proxy form and send it to the Company, at its Registered Office address, on or before 12.45 p.m. on 28th December, 2015.
i) Financial Year of the Company: 1st July, 2015 to 31st March, 2016 (9 months).
For the Financial Year 2015-2016
Tentative Date of Announcement of Audited/ Un-Audited Financial Results.
First quarter ended on September 30, 2015 : 10th November, 2015
Second quarter ending on December 31, 2015 : By 14th February, 2016
Third & final quarter ending on March 31, 2016 : By 30th May, 2016 (audited financial results
ii) Date of Book Closure:
The dates of Book Closure shall be from 24th December, 2015 to 30th, December, 2015 (both days inclusive).
iii) Dividend Payment Date: No dividend is recommended for the year.
iv) Listing on Stock exchange:
The Company's equity shares are listed on the Bombay Stock Exchnage Limited (BSE) and National Stock Exchange of India Limited (NSE). The following are the details of the Company's shares:
International Securities Identification Number (ISIN)
BSE - Stock Code : 500259
NSE - Stock Code : lykalabs
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400001; www.bseindia.com
Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai-400051; www.nseindia.com
v) Corporate Identity Number (CIN)
The Corporate Identity Number (CIN) allotted by the Ministry of Corporate Affairs, Government of India, is L24230GJ1976PLC008738. Your Company is registered in the State of Gujarat, India.
vi) Market Price Data: High, Low during each month of the Financial Year 2014-15.
The equity shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited for financial year 2014-15. Share price data of high and low for each month during the financial year 2014-2015 quoted on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited are mentioned as below:
vii) Registrar and Share Transfer Agent
Unit-1, Luthra Industrial Premises, Andheri-Kurla Road, Safed Pool, Andheri (E), Mumbai-400072 Contact no : 28515606, 28515644 Fax No : 28512885 Email Id : email@example.com Website : www.sharexindia.com
viii) Share Transfer System
Shares are sent for transfer in physical form which are processed and transferred by Registrar & Share Transfer Agent within 15 days from the receipt of proper documents following approval by the Share Transfer Committee. Share Transfers which are under objection are returned within 7 days. The Share Transfer Committee meets on a need basis to approve share transfers/transmissions. The Company submits a certificate obtained from Company Secretary in Practice on half-yearly basis regarding compliance with the share transfer formalities as required under clause 47 (c) of the Listing Agreement with Stock Exchange
x) Numbers of Shares in Demat and Physical Form as on 30th June, 2015
As of 30th June, 2015, 98.68% of the Company's shares representing 21296220 shares were held in Dematerialized form and the balance 1.32% representing 283780 shares were held in physical form.
xi) Outstanding Warrants for Conversion
460000 warrants issued under Series I to Promoter Group on Preferential basis are outstanding for conversion into Equity Shares as on 30th June, 2015.
xii) Plant Location
The Company's plant is located at Ankleshwar.
xiii) Address for Correspondence
Registered Office: 4801/B & 4801/A, G.I.D.C., Industrial Estate, Ankleshwar-393002, Contact no. 02646 221422/220549 Fax: 02646-250692 Email: firstname.lastname@example.org
xiv) Name of the Compliance Officer: Shri. P. G. Hindia
Admin Office: 101, Shivshakti Industrial Estate, Sir M.V. Road, Andheri (East), Mumbai-400059. Contact No: 022-66112200 Fax: 022-6611 2249 Email: email@example.com
The Company has complied with the mandatory requirements of Clause 49 of the Listing Agreement with the Stock Exchanges where the company's equity shares are listed
Non Mandatory requirements:
1. Chairman of the Board:
The Chairman of the Board is Executive.
2. Shareholder Rights-Half yearly results
The Company's Quarterly Half yearly and Annually/Yearly results are published in English and Marathi in Mumbai and in Gujarati daily newspapers of Surat. The results are also posted on the website of the Company i.e. www.lykalabs.com
3. Separate Posts of Chairman and CEO/Managing Director
The Chairman & Managing Director is same person.
4. Reporting of Internal Auditors
The Internal Auditors of the Company provides quarterly report to the Management of the Company.
5. Audit qualifications
Audit qualifications and management explanations thereto are reported in the Report of the Board of Directors.