REPORT ON CORPORATE GOVERNANCE
(Forming part of the Annual Report for the financial year ended 30th June, 2015)
Mount Shivalik Industries Limited (MSIL) has always endeavored to practice good Corporate Governance and commitment to act as good Corporate Citizen. We continue to believe that good Corporate Governance is essential to achieve long-term corporate goals and to enhance stockholders value. The Company has always been following the principles which govern Corporate Governance. The objectives before a Company are to create wealth for the society, maintain and preserve that wealth efficiently and to share the wealth with the stakeholders. Corporate Governance is the method by which the aforesaid objectives are achieved. The company follows all the principles of corporate governance in its true spirit and at all times through its code of conduct which serves as guideline to each Directors, Key Managerial Personnel and Employees.
BOARD OF DIRECTORS:
Your Company has an optimum combination of the Executive and Non-Executive Independent directors. The Board consists of ten Directors including three Executive Directors and Seven Non-Executive Directors, of whom four are independent as defined by Clause 49 of the Listing agreement.
ii) Board Meetings:
During the financial year ended 30th June, 2015, Eight Board Meetings were held i.e. on 29th August, 2014, 17th September, 2014, 14th November, 2014, 03rd December, 2014, 9th February, 2015, 20th April, 2015, 15th May, 2015 and 08th June, 2015.
The gap between any two Board Meetings was not more than four months as mandated in Clause 49 of the listing agreement.
The Table - 1 gives the Composition, Category of Board of Directors, their other directorships and attendance record:
i) Terms of Reference:
Apart from all the matters provided in Clause 49 of the listing agreement and Section 177 of the companies Act, 2013, the Audit Committee meets statutory auditors as and when required and discusses their findings, suggestions, observations and other related matters. It also reviews major accounting policies followed by the Company and ensures that assets are safeguarded and transactions are authorized, recorded and correctly reported.
The Audit Committee comprises of three non-executive directors, Mr. J. M. Malhotra, Mr. S. K. Chhibber and Mr. Rajiv Bali. Mr. J. M. Malhotra is designated as Chairman of the audit committee and Mr. Mradul Gaur, Company Secretary, acts as the Secretary of the Committee.
The committee met Six times during the financial year under review i.e., on 29th August, 2014, 14th November, 2014, 03rd December, 2014, 09th February, 2015, 20th April, 2015 and 15th May, 2015.
i) Terms of reference:
The Company has in place a remuneration committee consisting of three Non-Executive Directors, specifically to determine the Company's policy on specific remuneration packages for executive directors including pension rights and any compensation payment.
The Remuneration Committee comprises of three non-executive directors, Dr. K. S. Chugh, Mr. S. K. Chhibber and Mr. J. M. Malhotra. Dr. K. S. Chugh is designated as Chairman of the remuneration committee.
The committee met Only One time during the financial year under review i.e., on 3rd December, 2014.
iii) Details of Remuneration paid to Directors:
Table - 3 gives the details of remuneration for the financial year ended 30th June, 2015 to the Executive and Non-Executive Directors:
SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE:
The Company has a Shareholders / Investors Grievance Committee, which also acts as share transfer committee. The Committee looks into redressal of shareholders complaints like transfer of shares, non-receipt of annual report / balance sheet, non-receipt of declared dividend etc. It also monitors the performance of Registrar and Share transfer agent.
The committee is headed by Non-Executive Director Mr. Rajiv Bali. Other members are Mr. Sanjiv Bali and Mr. S. K. Chhibber. Mr. Mradul Gaur, Company Secretary, is the Compliance Officer.
During the financial year, fifteen meetings were held on 02/07/2014, 19/09/2014, 03/12/2014, 09/02/2015, 20/04/2015 and on 30/06/2015.
During the financial year under review, the Company has not received any complaints from shareholders / investors. There were no outstanding complaints or share transfers pending as on 30th June, 2015.
Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives:
• Provide an overview of the principles of risk management
• Explain approach adopted by the Company for risk management
• Define the organizational structure for effective risk management
• Develop a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions.
• Identify, assess and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Company's human, physical and financial assets.
RISK MANAGEMENT COMMITTEE
The Board has constituted Risk Management Committee to be involved in the process of identification, measurement, monitoring and mitigation of the various risks faced by the Company. The Committee will meet periodically and report to the top Management and Board.
The Risk Management committee comprises of three members out of two are members of the Board and Chief Financial Officer of the Company. The Committee shall take its terms of references from the Risk Management Policy of the Company.
SHARE TRANSFER COMMITTEE
The terms of reference of the Share transfer Committee includes, to approve, transfer and transmission of shares and issue of new/duplicate share certificates, whenever requested for by the shareholders of the Company. The Committee authorised Chairman & Managing Director and Managing Director of the Company to sign the Memorandum of Share Transfer/Transmissions submitted by Registrar of Transfer Agent and counter signed by Company Secretary of the company and same to be rectified by the Committee in subsequent meeting.
Presently, the share transfers which are received in physical form are processed and the share certificates returned within 7 days from the date of receipt, subject to the documents being valid and complete in all respects.
The Board has delegated the authority for approving transfer, transmission etc of the company's securities to the Share Transfer Committee. A summary of share transfer / transmission of the securities of the company so approved by the committee is being placed at every Board Meeting.
VIGIL MECHANISM & WHISTLE BLOWER POLICY
The company has an established mechanism for Directors / Employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the code of conduct or ethics policy. It also provides for adequate safeguards against victimization of directors/ employees who avail of the mechanism. The company affirms that no personnel have been denied access to the audit committee. The Company has formulated a Policy of Vigil Mechanism and has established a mechanism that any personnel may raise Reportable Matters within 60 days after becoming aware of the same. All suspected violations and Reportable Matters are reported to the Chairman of the Audit Committee. The key directions/actions will be informed to the Managing Director of the Company.
i. Disclosures on materially significant related party transaction that may have potential conflict with the interest of company at large - NIL.
ii. Detail of non-compliance by the company, penalties, and strictures imposed on company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years.
iii. Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee.
iv. Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause.
The particulars of transactions between the Company and its related parties as per the Accounting Standard 18 are mentioned in Note "40" of the Balance Sheet. However, these transactions are not likely to have any conflict with the Company's interest. The Company has complied with all applicable laws and regulations and no strictures/ penalties have been imposed on the Company by Stock Exchanges or SEBI or any statutory authority.
The Board has constituted Remuneration Committee. The Company has not put in place other non-mandatory requirements at present.
A qualified Practicing Company Secretary carried out Reconciliation of Share Capital Audit to reconcile the total admitted equity capital with National Security Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL) and the total issued and listed equity capital. The Reconciliation of Share Capital Audit Report confirms that the total issued / paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialize shares held with NSDL and CDSL.
MEANS OF COMMUNICATION:
The quarterly, half-yearly and annual un-audited / audited financial results of the Company are sent to the stock exchange immediately after being approved by the Board of Directors. The Annual Report of the Company is sent to all shareholders at their registered addresses while quarterly or half-yearly reports are not sent to the shareholders.
The quarterly and annual un-audited / audited financial results are published, in accordance with the guidelines of the Stock Exchange, in the following News Papers:
i) 'MINT HT' - English Daily (All India Edition)
ii) 'NAYA INDIA' - Hindi Daily (Jaipur Edition)
As required by Clause 49 of the Listing Agreement, Management Discussion and Analysis Report is appended and forms part of the Annual Report, which is being sent to the shareholders of the Company.
GENERAL SHAREHOLDER INFORMATION:
i) Annual General Meeting: Day :
Day : Wednesday
Date : 30th December, 2015
Time : 12.00 P.M.
Venue : 140th Milestone, (Delhi-Jaipur) National Highway No.8,
Village - Gunti, Tehsil - Behror, Distt. - Alwar (Rajasthan)
ii) Financial Calendar 2015-16 (tentative
Financial Year : 1st July, 2015 to 30th June, 2016
Approval of Quarterly/Annual Results:
Results for the quarter ending Sept., 30 : Before 14th November, 2015
Results for the quarter ending Dec., 31 : Before 14th February, 2016
Results for the quarter ending March, 31 : Before 14th May, 2016
Results for the quarter/year ending June, 30 : Before 29th August, 2016
iii) Book Closure:
The register of Members and Share Transfer Books of the Company shall remain closed for 7 days from 24th day of December, 2015 to 30th day of December, 2015 (both days inclusive).
iv) Dividend Payment Date:
No dividend has been recommended by the Board of Directors for the financial year 2014-15.
V)Listing in Stock Exchanges and Stock Codes:
At present, the Company's shares are listed at BSE Limited and the Stock code is 507522.
The ISIN number allotted to the Company for dematerialisation of shares by NSDL & CDSL is INE410C01019
vii) Registrar and Share Transfer Agent:
M/s. MAS Services Ltd.,
T-34, II Floor, Okhla Industrial Area, Phase-II, New Delhi - 110020
vii) Share Transfer System:
As per SEBI circular D&CC/FITTC/CIR-15/2002 dated 27th December, 2002 the Company should have a common place of share transfer for both physical & Demat. Accordingly the Company has appointed M/s. MAS Services Ltd, T-34, II Floor, Okhla Industrial Area, Phase-II, New Delhi - 110020 as its Registrar and Share Transfer Agent.
All matters relating to share transfer / transmission / demat / remat etc. are being handled by M/s. MAS Services Ltd., New Delhi, Registrar and Share Transfer Agents of the Company. The share transfer requests received are processed by them and a memorandum of transfer is sent to the Company for approval by the committee. The time taken for processing share transfer requests including dispatch of share certificate is generally 15 days. The dematerialisation requests are processed within 21 days. The Shareholders Grievance Committee of the Company monitors the functioning of the system on regular basis, so as to ensure that there are no delays or lapses.
In compliance with Clause 47 (c) of the Listing Agreement, every six months, the system is audited by a practicing Company Secretary and a Certificate to that effect is issued and filed with the Stock Exchange.
xii) Dematerialization of Shares and Liquidity:
As on 30th June, 2015, 87.09% of the equity shares of the Company were held in dematerialized form and the rest 12.91% in physical form.
The Reconciliation of Share Capital Audit Report from a practicing Company Secretary confirming that the total issued capital of the Company is in aggregate with the total number of equity shares in physical form and the total number of dematerialized equity shares held with NSDL and CDSL, is placed before the Board on a quarterly basis. A copy of the Audit Report is periodically submitted to the stock exchange where the equity shares of the Company are listed.
The Equity Shares of the Company are listed and actively traded at BSE Limited (BSE), which has nationwide trading terminals and therefore provide full liquidity to the investors.
xiii) Outstanding GDR's/ADR's/Warrants/Convertible instruments and their likely impact on equity: Nil
xiv) Plant Location:
140th Milestone, Delhi-Jaipur Highway No. 8 Village - Gunti, Tehsil - Behror, Distt. Alwar (Rajasthan)
xv) Address for correspondence:
a) Shareholders correspondence (for share transfer/transmission, demat/remat of shares, payment of dividend and any other query relating to the securities of the Company should be addressed to the Company's Registrar and Share Transfer Agents):
MAS Services Limited
T-34, 2nd Floor, Okhla Industrial Area, Phase - II, New Delhi - 110020
Ph. No.'s: 011-26387281-83 Fax. No.: 011-26387384
b) Shareholders correspondence (for any other matter, including any query on Annual Report may be addressed to 'The Company Secretary' of the Company):
The Company Secretary
Mount Shivalik Industries Limited
C - 153/2, Okhla Industrial Area, Phase - I, New Delhi - 110 020
Telephone: 011-26371701 Fax: 011-26371700
xvi) Email Address: firstname.lastname@example.org
xvii) CEO and CFO Certification
The Managing Director and Director- Finance of the Company give annual certification on financial reporting and internal controls to the Board in terms of Clause 49. The Managing Director and Director-Finance also give quarterly certification on financial results while placing the financial results before the Board in terms of Clause 41 of the Listing Agreement.
MEETING OF INDEPENDENT DIRECTORS
The Independent Directors of the Company had met during the year on 30.06.2015 to review the performance of non- Independent Directors and the Board as a whole, review the performance of the Chairperson of the Company and had accessed the quality, quantity and timeliness of flow of information between the company management and the Board.
The Company has no Subsidiary Company.
RELATED PARTY TRANSACTION
There have been no materially significant related party transactions with the company's promoters, directors, the management, their subsidiaries or relatives which may have potential conflict with the interests of the company at large. The necessary disclosures regarding the transactions are given in the notes to accounts. The Company has also formulated a policy on dealing with the Related Party Transactions and necessary approval of the audit committee and Board of directors were taken wherever required in accordance with the Policy.
There have been no instances of non-compliance by the company on any matters related to the capital markets, nor have any penalty/strictures been imposed on the company by the Stock Exchanges or SEBI or any other statutory authority on such matters.
CODE OF CONDUCT FOR THE BOARD OF DIRECTORS AND THE SENIOR MANAGEMENT
The standards for business conduct provide that the directors and the senior management will uphold ethical values and legal standards as the company pursues its objectives, and that honesty and personal integrity will not be compromised under any circumstances. As provided under Clause 49 of the Listing Agreement with the stock exchanges, the Board members and senior management personnel have affirmed compliance with the code of conduct for the financial year 2015-2016.
REQUEST TO INVESTORS
Shareholders are requested to follow the general safeguards/procedures as detailed hereunder in order to avoid risks while dealing in the securities of the company.
Shareholders are requested to convert their physical holding to demat/electronic form through any of the DPs to avoid any possibility of loss, mutilation etc., of physical share certificates and also to ensure safe and speedy transaction in securities.
Shareholders holding shares in physical form should communicate the change of address, if any, directly to the Registrars and Share Transfer Agent of the company.
It has become mandatory for transferees to furnish a copy of Permanent Account Number for registration of transfer of shares held in physical mode.
Shareholders holding shares in physical form that have not availed nomination facility and would like to do so are requested to avail the same, by submitting the nomination in Form 2B. The form will be made available on request. Those holding shares in electronic form are advised to contact their DPs.
As required by SEBI, it is advised that the shareholders furnish details of their bank account number and name and address of their bank for incorporating the same in the dividend warrants. This would avoid wrong credits being obtained by unauthorized persons.
RECONCILIATION OF SHARE CAPITAL AUDIT
A quarterly audit was conducted by a Practicing Company Secretary, reconciling the issued and listed capital of the company with the aggregate of the number of shares held by investors in physical form and in the depositories and the said certificates were submitted to the stock exchanges within the prescribed time limit. As on 30th June, 2015 there was no difference between the issued and listed capital and the aggregate of shares held by investors in both physical form and in electronic form with the depositories. 52,66,299 equity shares representing 87.09 of the paid up equity capital have been dematerialized as on 30th June, 2015.
INFORMATION TO SHAREHOLDERS
A brief resume of the director reappointed together with the nature of his experience and details of the other directorships held by him is annexed to the Notice convening the Annual General Meeting.
Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares shall be transferable in case of death of the registered shareholder(s). Nomination facility in respect of shares held in electronic form is also available with the depository participants as per the bye-laws and business rules applicable to NSDL and CDSL. Nomination forms can be obtained from the Company's Registrar and Share Transfer Agent.
ELECTRONIC CLEARING SERVICE
SEBI had vide its Circular No. DCC/FITTCIR-3/2001 dated 15th October, 2001 advised that all Companies should mandatory use ECS facility wherever available. In the absence of ECS facility, Company may use warrants for distributing the dividends and vide its Circular No. D&CC/FUTTCUR-4/2001 dated 13th November, 2001, SEBI had advised Companies to mandatory print the Bank Account Details furnished by the Depositories on the Dividend warrants. This ensures that the dividend warrants, even if lost or stolen, cannot be used for any purpose other than for depositing the money in the accounts specified on the dividend warrant and ensures safety for the investors. However, members who wish to receive dividend in an account other than the one specified while opening the depository account, may notify their DPs about any change in their bank account details.
For and on behalf of Board of Directors
MOUNT SHIVALIK INDUSTRIES LIMITED
(Sanjiv Bali) Managing Director
Place: New Delhi
Date: 03rd December, 2015