REPORT ON CORPORATE GOVERNANCE
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
The Company's philosophy of Corporate Governance emphasizes on maintaining the highest level of accountability, transparency in all its dealings, timely disclosures and dissemination of price sensitive information and matters of interests to its stakeholders, ensuring absolute compliance with all applicable laws and regulations and conducting business ethically.
The Company believes that Corporate Governance is about conducting business in accordance with the applicable laws, rules and regulations while striking a balance between economic and social goals.
2.BOARD OF DIRECTORS:
The Board of Directors of the Company consists of directors having rich knowledge and experience in the industry and related sectors fur providing strategic guidance and direction to the Company.
a.Size and Composition:
The Board of Directors of the Company has optimum combination of Executive and Nun-Executive/Independent Directors. As on 31st March, 2015, the Board of Directors comprised of 6 (Six) directors out of which 4 (Four) were Nun-Executive Directors and 2 (Two) Executive Directors. Moreover, 3 (Three) are Nun-Executive/Independent Directors. The Chairman of the Board is Nun-Executive Director.
As required under Section 149(3) of the Companies Act, 2013 and Clause 49 II(A) of the Listing Agreement, Mrs.Manju Bafna, a Woman Director, has been appointed as an Executive Director on the Board w.e.f 13th February, 2015.
The composition of the Board of Directors is in compliance with the requirements of Clause 49 of the Listing Agreement.
Necessary disclosures have been made by Directors stating that they do nut hold membership in mure than 10 Committees or act as a Chairman in mure than 5 Committees in terms of Clause 49 of the Listing Agreement.
During the financial year 2014-15, 11 (Eleven) meetings of Board of Directors were held on viz., 30th April, 2014, 5th June, 2014, 20th June, 2014, 23rd June, 2014, 13th August, 2014, 27th October, 2014, 14th November, 2014, 30th November, 2014, 1st December, 2014, 27th January, 2015 and 13th February, 2015.
The details of composition of the Board of Directors, their attendance at each Board meeting held during the financial year 2014-15 and at the last Annual General Meeting, their directorships in other companies and positions in various Committees are as follows:
1.C - Chairman, P - Promoter, I - Independent Director, MD- Managing Director, NED - Non Executive Director, ED - Executive Director, CFO - Chief Financial Officer, CEO- Chief Executive Officer
2.In accordance with Clause 49 of the Listing Agreement, Membership/Chairmanships of only the Audit Committee and Stakeholders' Relationship Committee of all Public Limited Companies are considered.
3.The directorship held by directors as mentioned above do not include Directorship in private limited companies, foreign companies and companies registered under Section 8 of the Companies Act, 2013.
c.Procedure adopted by the Board:
The Company Secretary in consultation with Chairman of the Company and Managing Director/ Executive Director, drafts the Agenda for each Board meeting along with explanatory notes and distributes these in advance to the Directors. The Company has well defined process for placing vital and sufficient information before the Board. Any matter requiring discussion or decision or approval of the Board or Committee, is communicated to the Company Secretary well in advance so that the same could be included in the Agenda for the respective meetings. The Board meets at least once in a quarter and maximum time gap between two meetings did not exceed one hundred and twenty days.
d.Separate 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 the Chairman) and the Board as whole and the quality, quantity and timeliness of flow of information between the Company management and the Board.
e.Directors Familiarization programme:
The Company undertakes necessary induction programme for new Directors and ongoing training for existing Directors. The new directors are briefed about the Company processes and to familiarize them with the business activities of the Company. The management provides such information and training either at the meeting of Board of Directors or otherwise.
The induction process is designed to:
•build an understanding of the Company processes and
•fully equip Directors to perform their role on the Board effectively
Upon appointment, Directors receive a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. The details of Director's induction and familiarization are available on the Company's website at www.networthdirect.com.
f.Code of Conduct and Certificate on Compliance of Corporate Governance:
The Board of Directors has laid down a Code of Conduct applicable to all the Board members and all the employees in the management grade of the Company. This Code of Conduct emphasizes the Company's commitment to Compliance with the highest standards of legal and ethical behavior. This Code of Conduct is available on the website of the company at www.networthdirect.com.
All Directors and senior management have adhered to the Code of Conduct of the company during the year and have signed declarations in compliance with the Code of Conduct. The declaration signed by Mr. Vaibhav Shah, Managing Director is given separately in the Annual Report.
A Certificate from practicing Company Secretary on Compliance of provisions related to Corporate Governance as stipulated in Clause 49 of the Listing Agreement by the Company is also annexed to this report.
g.Vigil Mechanism / Whistle Blower Policy:
The Company promotes ethical behavior in all its business activities and adopted Vigil Mechanism/Whistle Blower Policy to report unethical and fraudulent behavior. Under the said policy the employee, vendors and customers can report any suspected or confirmed incident of fraud, misconduct, unethical behavior etc. to the Company. This will ensure fraud-free work & ethical environment.
The mechanism also provides for adequate safeguards against victimization of employees who avail of the mechanism and direct access to the Chairman of the Audit Committee is also available in exceptional cases. The Whistle Blower Policy is available on the website of the Company viz., www.networthdirect.com.
h. Committees of the Board:
The Board of Directors of the Company has constituted the following Committees:
(ii)Stakeholders' Relationship Committee
(iii)Nomination and Remuneration Committee
3. AUDIT COMMITTEE:
The purpose of the Audit Committee is to ensure the objectivity, credibility and correctness of the Company's financial reporting and disclosure processes, internal controls, risk management policies and processes, tax policies, compliance and legal requirements and other associated matters.
The quorum of the Committee is two independent members present or one third of the total members of the Committee, whichever is higher. As on 31st March, 2015; the Audit Committee consists of 3(Three) Non-Executive/Independent Directors and 1 (One) Non-Executive Director.
During the financial year 2014-15, the members of Audit Committee met 6 (Six) times on 5th June, 2014, 13th August, 2014, 14th November, 2014, 30th November, 2014, 1st December, 2014, and 13th February, 2015.
The Company Secretary acts as the Secretary to the Committee. Terms of Reference:
The terms of reference of the Audit Committee broadly are as under:
•Overseeing the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
•Reviewing with management, the quarterly/half yearly / annual financial statements before submission to the Board for approval with particular reference to:
?Matters required to be included in the Directors' Responsibility Statement.
?Changes, if any, in accounting policies and practices and reasons for the same.
?Major accounting entries involving estimates based on the exercise of judgment by the management.
?Significant adjustments made in the financial statements arising out of audit findings.
?Compliance with listing and other legal requirements relating to financial statements.
?Disclosure of related party transactions.
?Qualifications in draft audit report.
•Recommending the appointment/re-appointment/removal of statutory auditors, fixation of audit fees and also approval of payments for any other services.
•Reviewing with management, Statutory and internal auditor's adequacy of the internal control systems.
•Discussing with internal and statutory auditors of any significant findings and follow-up thereon and reviewing the reports furnished by them.
•Reviewing the Company's financial and risk management policies.
•Carrying out such other function as may be specifically referred to the Committee by the Board of Directors and/ or other Committees of Directors of the Company.
4. STAKEHOLDER'S RELATIONSHIP COMMITTEE (Formerly known as Investors' Grievance Committee):
The Company has a duly constituted Stakeholders Relationship Committee as per the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
During the financial year 2014-15, the members of Stakeholders' Relationship Committee met 4 (Four) times on 5th June, 2014, 13th August, 2014, 14th November, 2014 and 13th February, 2015.
Terms of Reference:
The Committee is specifically responsible for the redressal of shareholders'/investors' grievances pertaining to non-receipt of Annual Report, dividend payments, Share transfers and other miscellaneous complaints and recommends measures for overall improvement in the quality of investor services.
The Committee also overviews the performance of the Registrar and Share Transfer Agents of the Company relating to investors services and recommend measures for improvements.
5. NOMINATION AND REMUNERATION COMMITTEE (Formerly known as Remuneration Committee):
The Company has duly constituted a Nomination and Remuneration Committee as per the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. During the financial year 2014-15, the members of Nomination and Remuneration Committee met 6 (Six) times on 5th June, 2014, 23rdJune, 2014, 14th November, 2014, 1st December, 2014, 27th January, 2015 and 13th February, 2015.
Terms of reference:
The Committee is empowered to-
•Formulate criteria for determining qualifications, positive attributes and independence of Directors and evaluating the performance of the Board of Directors.
•Identification and assessing potential individuals with respect to their expertise, skills, attributes, personal and professional standing for appointment and re-appointment as Directors / Independent Directors on the Board and as Key Managerial Personnel (KMP).
•Formulate a policy relating to remuneration for the Directors, members of the Committee and also the Senior Management Employees.
Nomination & Remuneration policy:
The Company follows a comprehensive policy for selection, re-commendation, appointment of Directors and other senior managerial employees and also on the remuneration, and such other related provision as applicable.
•Any person to be appointed as a Director on the Board of Director of the Company or as KMP or Senior Management Personnel, including Independent Directors, shall possess appropriate skills, experience and knowledge in one or more fields of sciences, actuarial sciences, banking, finance, economics, law, management, sales, marketing, administration, research, corporate governance or technical operations.
•Any person to be appointed as a Director on the Board of the Company shall possess the relevant experience and shall be able to provide policy directions to the Company, including directions on good corporate governance.
•While appointing any person as Chief Executive Officer, Managing Director or a Whole-time director of the Company, his / her educational qualification, work experience, industry experience, etc. shall be considered.
•Remuneration of Executive Directors:
iAt the time of appointment or re-appointment, the Executive Directors shall be paid such remuneration as may be mutually agreed between the Company (which includes the Nomination &Remuneration Committee and the Board of Directors) and the Executive Directors within the overall limits prescribed under the Companies Act.
iiThe remuneration shall be subject to the approval of the Members of the Company in General Meeting.
iiiThe remuneration of the Executive Directors is broadly divided into fixed component.
ivThe fixed compensation shall comprise salary, allowances, perquisites, amenities and retiral benefits.
In determining the remuneration (including the fixed increment and performance bonus) the Nomination& Remuneration Committee shall consider the following:
I The relationship of remuneration and performance benchmarks
ii Balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;
iii Responsibility of the Executive Directors and the industry benchmarks and the current trends;
iv The Company's performance vis-a-vis the annual budget achievement and individual performance.
•Remuneration of Non-Executive Directors:
The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board / Committee meetings. A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Independent Directors of the Company shall not be entitled to participate in Stock Option Scheme of the Company, if any, introduced by the Company
•Remuneration of Senior Management Employees:
In determining the remuneration of the Senior Management employees (i.e. KMPs and Executive Directors) the Nomination & Remuneration Committee shall consider the following:
iThe relationship of remuneration and performance benchmark
iiThe components of remuneration includes salaries, perquisites and retirement benefits;
iiiThe remuneration including annual increment and performance incentive is decided based on the criticality of the roles and responsibilities, the Company's performance vis-a-vis the annual budget achievement, industry benchmark and current compensation trends in the market.
The Executive Directors will carry out the individual performance review based on the standard appraisal matrix and after taking into account the appraisal score card and other factors mentioned hereinabove, recommends the annual increment to the Nomination & Remuneration Committee for its review and approval.
6. SUBSIDIARY COMPANIES
As on 31st March, 2015, the Company had following subsidiaries:
1.Networth Commodities & Investments Limited
2.Networth Wealth Solutions Limited
3.Ravisha Financial Services Private Limited
4.Networth Insurance Broking Private Limited
5.Monarch Insurance Broking Private Limited
The Company does not have any material non- listed Indian Subsidiary company.
The minutes of the Board meetings along with a report on significant developments of the unlisted subsidiary companies are periodically placed before the Board of directors of the Company.
The Company has a policy for determining 'material subsidiaries which is disclosed on the website at www.networthdirect.com
a.Related Party Transactions:
There were no materially significant related party transactions, pecuniary transactions or relationship between the Company and its Directors during the financial year ended 31st March, 2015 that may have potential conflict with the interest of the Company at large. The transactions with the related parties, as per the requirements of the Accounting Standard (AS) 18, are disclosed in the Notes on Accounts, forming part of the Annual Report. The policy on dealing with Related Party Transaction is available on Company's website at www.networthdirect.com.
b.Compliance related to Capital Market:
The Company has complied with the requirements of the Stock Exchange, Securities and Exchange Board of India (SEBI) and other statutory authorities on all matters relating to capital market during the last three years. No strictures have been imposed on the Company by the Stock Exchanges, SEBI or other Statutory Authorities. The Company has paid the listing fees for the year 2015-16 to BSE Limited.
c.Disclosure of Accounting Treatment:
In the preparation of the financial statements, the Company has followed the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable.
d.Disclosure of Risk Management:
The Company has laid down procedure to inform Board members about the risk assessment and minimization procedures. The Company has framed the risk assessment and minimization procedure, which is periodically reviewed by the Board.
In terms of the requirements of Clause 49(IX) of the Listing Agreement, Mr. Vaibhav Shah, Managing Director and Mr. Ashok Bafna, Chief Financial Officer has submitted necessary certificate dated 29thMay, 2015 confirming the particulars specified under the said clause.
f.Details of Compliance with Mandatory and Non- Mandatory Requirements under Clause 49 of Listing Agreement:
The Company has complied with all mandatory requirements of Clause 49 of the Listing Agreement.
The Company has adopted the following non-mandatory requirements of the Clause 49 of the Listing Agreement:
• Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee.
9.MEANS OF COMMUNICATIONS:
a.The quarterly, half-yearly and annual results of the Company are forwarded to BSE Limited where the shares of the Company are listed and published in "Free Press Journal"(English) and Navshakti (Marathi).
b.The Audited financial results and shareholding pattern are displayed on the Company's website at www.networthdirect.com. The Company also regularly provides information to the Stock Exchange as per the requirement of Listing Agreement and updates the same on the Company's website periodically.
c.The Management Discussion and Analysis for the year ended 31st March, 2015 is part of Annual Report and annexed separately.
d.The Company has not made any presentations/press release to Institutional Investors or to the Analysts during the year under review. 10. GENERAL SHAREHOLDER INFORMATION:
a.Annual General Meeting
Date: 30th September, 2015
Time: 12.30 p.m.
Venue : Jayleela Banquet Opp. Railway Nagar, Sonawala Road, Goregaon East, Mumbai, Maharashtra 400063
The financial year of the Company starts from 1st April of every year and ends on 31st March of the succeeding year.
c.Financial Calendar (Provisional for 2015-16)
Subject Matter Tentative Dates of the Board Meeting
First Quarter Results: On 14th August, 2015.
Second Quarter Results :By 14th November, 2015.
Third Quarter Results: By 13th February, 2016.
Fourth Quarter/ Yearly Results : By 30th May, 2016.(Audited Results)
D .Date of Book Closure:
Saturday, the 26thday of September, 2015 to Wednesday, the 30th day of September, 2015 (both days inclusive)
e. Cut-off date for remote e-voting:
The remote e-voting/voting rights of the shareholders/beneficial owners shall be reckoned on the equity shares held by them as on Cut-off Date i.e Wednesday, 23rd September, 2015.
f. Listing on Stock Exchange:
The Equity Shares of the Company are listed on the BSE Limited.
g.Stock Code & ISIN:
Stock Code: 511551
Demat ISIN Number in NSDL & CDSL: INE903D01011
i. Share Transfer System:
All shares sent or transferred in physical form are registered by the Registrar & Share Transfer Agents within 15 days of the lodgment, if documents are found in order. Shares under objection are returned within two weeks. All requests for dematerialization of shares processed and the confirmation are given to the respective depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) within 21 days.
l. Dematerialization of Equity Shares and Liquidity
As on 31st March, 2015, 99.12% of the equity shares of the Company are held in dematerialized form with NSDL and CDSL. m. Outstanding ADR / GDR/ Warrants/ Convertible Instruments and their impact on Equity:
Your Company has not issued any ADRs/GDRs/Warrants or any Convertible Instruments.
n. Address for Investor Correspondence
For any assistance regarding dematerialization of shares, share transfers, transmissions, change of address, non-receipt of dividend or any other query relating to shares, please write to:
Ms. Sophia Jain
Company Secretary & Compliance Officer Networth Stock Broking Limited Office no.901/902, 9th Floor, Atlanta Centre, Opp. Udhyog Bhawan, Sonawala Road, Goregaon (East), Mumbai-400 063
Telephone: 022-30641600 Fax No: 022-26850257 Email: email@example.com Website: www.networthdirect.com
Registrar & Share Transfer Agents Skyline Financial Services Private Limited Unit - Networth Stock Broking Limited D- 153A, 1st Floor, Okhla Industrial Area, Phase- I, New Delhi- 110020 Tel: 011-26812682/83 Email: firstname.lastname@example.org