CORPORATE GOVERNANCE REPORT
[Information given in this Report relates to the Financial Year ended March 31, 2015]
1 THE COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:
The Company believes that transparence through Corporate Governance is a key element in achieving high standards of corporate behaviour, in improving efficiency, and in enhancing the confidence of investors.
To this end, the Company adopts best practices, processes and policies of governance in order to ensure professionalism and accountability without compromising ethical standards.
The Company's policy of adequate and timely compliance disclosures are based on proper systems of internal control and risk management to ensure professionalism, accountability and compliance with statutes, so that there is timely and correct flow of information to the Board, and to all Stakeholders including Members.
2 BOARD OF DIRECTORS:
A) Name of Directors
1 Padma Bhushan Shri Moosa Raza (Chairman - ID & NED*)
2 Shri Rama Varma (ID & NED*)
3 Shri Arjan R. Gurbuxani (ID & NED*)
4 Smt. Rajani M. Bhagat (Promoter & NED*)
5 Smt. Aruna Makhan (ID & NED*)
6 Shri Rahul V. Sagar (Promoter & Executive Director)
7 Shri Kunal V. Sagar (Promoter & Executive Vice Chairman)
A brief resume of Directors, including Smt. Bhagat, nature of their expertise in specific functional areas, and company names in which they hold Chairmanships, Directorship and Memberships of the Board / Committees, and shareholding in the Company are provided in this Report.
B) Brief Resume of Directors
1 Padma Bhushan Shri Moosa Raza (DIN- 00145345) - Chairman - ID & NED*
Shri Moosa Raza, aged 78 years, has been a Civil Servant for 35 years and is a recipient of the Padma Bhushan awarded by the Hon'ble President of India for his distinguished civil service to the Nation.
Shri Raza has served the Governments of Gujarat, Jammu & Kashmir, Uttar Pradesh and the Government of India in various capacities as Secretary (Health), the Secretary in Cabinet Secretariat, Secretary of Steel, and Governor's Advisor. He was the President of the Indian Steel Alliance. He runs several NGOs dealing with Education and is associated with Central Universities.
Shri Raza also headed as CEO more than 10 public and private sector Industrial and Commercial organizations, such as the National Textile Corporation, Gujarat State Fertilizers & Chemicals, the India Trade Promotion Organization, the Calico Group of Companies, etc. He was elected Chairman of the Standing Committee of Public Enterprises, and was a Member/Director of several organizations dealing with management and administration such as the International Management Institute, IMI-A, SMG, etc.
Shri Raza has been a director of the Company since July 1996 and was re-appointed as an Independent Director and Chairman by the Board effective from October 28, 2006. Subsequently, Members at their meeting held on August 30, 2007 confirmed the appointment of Shri Raza as an independent director liable to retire by rotation.
Members of the Company at their 55th Annual General Meeting held on September 23, 2014 appointed Shri Raza as an Independent Director to hold office upto March 31, 2019, and not liable to retire by rotation.
He is also holding the position of Director on the Board of the National Waqf Development Corporation Limited.
He does not hold any Equity Shares of the Company.
2 Shri Rama Varma (DIN- 00031890) - ID & NED*
Shri Rama Varma, aged 65 years, graduated with a B.Sc. Shri Varma has been occupying the office of Director of the Company since March 1978 and was re-appointed as an Independent Director by the Board effective June 24, 2006.
Subsequently, Members at their meeting held on September 28, 2006 confirmed the appointment of Shri Varma as an independent director liable to retire by rotation.
Members of the Company at their 55th Annual General Meeting held on September 23, 2014 appointed Shri Varma as an Independent Director to hold office upto March 31, 2019 , and not liable to retire by rotation.
He is also holding the position of Managing Director of Aspinwall & Co. Limited.
He holds 1,925 Equity Shares of the Company.
3 Shri Arjan R. Gurbuxani (DIN- 00425885) - ID & NED*
Shri Arjan R. Gurbuxani, aged 81 years, graduated with B.A. (Hons.), and LL.B., both from Bombay University and completed C.A.I.I.B.
Shri Gurbuxani has served Multinational Banks in senior positions both in India and abroad for 42 years.
Shri Gurbuxani has been a Director of the Company since 1994 and was re-appointed as an Independent Director by the Board effective June 24, 2006. Subsequently, Members at their meeting held on September 28, 2006 have confirmed the appointment of Shri Gurbuxani as an Independent Director liable to retire by rotation.
Members of the Company at their 55th Annual General Meeting held on September 23, 2014 appointed Shri Gurbuxani as an Independent Director to hold office upto March 31, 2019 and not liable to retire by rotation.
Shri Gurbuxani is the CEO of a Public Charitable Trust established in 1903. The Trust manages in Rishikesh (Uttarakhand) two CBSE affiliated schools with more than 3,000 students and two hospitals with more than 280 Beds. One of the hospitals is dedicated to Eye Care and has performed more than 70,000 free Eye Surgeries since 2008.
He holds 724 Equity Shares of the Company.
4 Smt. Aruna Makhan (DIN- 00025727) - ID & NED*
Smt. Aruna Makhan, aged 71 years, joined the IA&AS in 1967 and opted for the ICAS in 1976.
Smt. Makhan acquired 37 years of experience in handling public financial management at the apex level, and retired as Controller General of Accounts, Government of India. She has also been the Director of the National Institute of Finance Management under the aegis of the Ministry of Finance. She was a member of the Board of Directors of Oriental Bank of Commerce, TTCI, PEC and Prasar Bharati (Broadcasting Corporation of India), besides having held several directorial posts in various Government Undertakings and Autonomous Bodies.
Smt. Makhan has been a director of the Company since July 2004 and was re-appointed as an independent director by the Board effective October 28, 2006.
Subsequently, Members at their meeting held on August 30, 2007 confirmed the appointment of Smt. Makhan as an Independent Director liable to retire by rotation.
Members of the Company at their 55th Annual General Meeting held on September 23, 2014 appointed Smt. Makhan as an Independent Director to hold office upto March 31, 2019 and not liable to retire by rotation.
She is currently an Independent Director on the Board of Mangalam Cements Limited.
She does not hold any Equity Shares of the Company.
5 Smt. Rajani M. Bhagat (DIN-00870716) - Promoter & NED*
Smt. Rajani M. Bhagat, aged 77 years, graduated with B.A. (Hons.), B.Com, B.Sc. (Economics).
Smt. Bhagat has been occupying the office of Director since March 2003 and was reappointed as a director by the Board effective October 28, 2006. Subsequently, Members at their meeting held on August 30, 2007 confirmed the appointment of Smt. Bhagat as a Director liable to retire by rotation
Members of the Company at the 51st, 54th & 55th Annual General Meetings held on September 14, 2010, September 27, 2013 and September 23, 2014 respectively have re-appointed Smt. Bhagat as a Director liable to retire by rotation.
She holds 6,73,299 Equity Shares of the Company.
6 Shri Rahul V. Sagar (DIN- 00388980) - Promoter & Executive Director
Shri Rahul V. Sagar, aged 44 years, graduated with a B.A. in Economics.
Shri Rahul V. Sagar has been occupying the office of director since June, 2006. Subsequently, Members at their meeting held on September 28, 2006 confirmed the appointment of Shri Rahul V. Sagar as a director liable to retire by rotation.
Prior to joining Nirlon Limited, Shri Rahul V. Sagar worked as the Chief Operating Officer of Sempertrans Nirlon Private Limited.
Shri Rahul V. Sagar has occupied the office of the Executive Director effective July 1, 2009 and is not liable to retire by rotation.
He is the brother of Shri Kunal V. Sagar, one of the directors of the Company.
He holds 13,29,750 Equity Shares of the Company.
7 Shri Kunal V. Sagar (DIN 00388877) - Promoter & Executive Vice Chairman
Shri Kunal V. Sagar, aged 47 years, graduated with a B.A. in Economics.
Shri Kunal V. Sagar has been occupying the office of director since December 1995. Subsequently, Members at their meeting held on September 24, 1997 confirmed the appointment of Shri Kunal V. Sagar as joint Executive Vice Chairman of the Company, not liable to retire by rotation.
Prior to joining Nirlon Limited, Shri Kunal V. Sagar worked with the Republic National Bank of New York in the United States from 1990 to 1994.
He is the brother of Shri Rahul V. Sagar, one of the directors of the Company.
He holds 13,29,750 Equity Shares of the Company.
3 AUDIT COMMITTEE:
i) The Role of the Audit Committee as per the Companies Act 2013, and the listing agreement, is as under:
1 Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that Financial Statements are correct, sufficient and credible;
2 Recommending to the Board the appointment, remuneration and terms for Auditors of the Company;
3 Approval of payment to the Statutory Auditors for any other services rendered by the Statutory Auditors;
4 Reviewing with the Management the Annual Financial Statements before submission to the Board for approval, with particular reference to:
a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of Section 134 (3) (c) of the Companies Act, 2013.
b) Changes, if any, in accounting policies, practices, and reasons for the same.
c) Major accounting entries involving estimates based on the exercise of judgment by the Management.
d) Significant adjustments made in the Financial Statements arising out of audit findings.
e) Compliance with the listing agreement and other legal requirements relating to the 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 utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take steps in the matter as may be required;
7 Review and monitor the Auditors' independence and performance, and effectiveness of the 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 the performance of the Statutory and the Internal Auditors, and adequacy of the internal control systems;
13 Reviewing the adequacy of the internal audit function, if any, including the structure of the appointment of the Internal Auditor, remuneration, internal audit department, reporting structure, coverage and frequency of the internal audit;
14 Discussion with the Internal Auditors on any significant findings and follow up thereon;
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 the Statutory Auditors before the audit commences, about the nature and scope of audit, as well as post-audit discussion to ascertain any areas of concern;
17 To look into reasons for defaults in the payment to lenders, depositors, debenture holders, Shareholders/ Members (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 & background, etc. of the candidate;
20. Carrying out any other function as is mentioned in terms of reference of the Audit Committee.
ii) The Audit Committee constituted by the Board of Directors of the Company consists of 4 (four) Independent Non Executive Directors, viz. Shri Moosa Raza (Chairman), Shri Rama Varma, Shri Arjan R. Gurbuxani and Smt. Aruna Makhan.
iii) The constitution of this Audit Committee meets with the requirement of Clause 49 of the listing agreement with the BSE Limited. The terms of reference for the Audit Committee and frequency of meetings meet the requirements of law.
iv) Shri Jasmin K. Bhavsar, Company Secretary, Vice President (Legal) & Compliance Officer of the Company is the Secretary of the Audit Committee.
4 NOMINATION & REMUNERATION COMMITTEE:
i) Terms of Reference:
The Nomination & Remuneration Committee reviews the policy on remuneration packages for Executive Directors, Key Managerial Personnel and other senior executives, their service contracts, ESOPs, etc.
ii) The Nomination & Remuneration Committee constituted by the Board of Directors of the Company consists of 4 Independent Directors, viz. Shri Arjan R. Gurbuxani (Chairman), Shri Moosa Raza, Shri Rama Varma, and Smt. Aruna Makhan.
iii) The Chairman of the Nomination and Remuneration Committee will be present at the Annual General Meeting to answer Shareholders /Members queries. The Chairman of the Meeting will decide who should answer shareholders/members queries.
iv) During the Financial Year 2014- 15, the Nomination & Remuneration Committee met 3 (three) times on the following dates. Details of the Directors attendance are as under:-
v) Nomination & Remuneration Policy
The Committee interalia recommends the appointment and managerial remuneration payable to Executive Directors, Key Managerial Personnel and other senior executives of the Company based on their contribution to the growth and development of the Company.
5 STAKEHOLDERS RELATIONSHIP COMMITTEE:
i) The Stakeholders Relationship Committee constituted by the Board of Directors of the Company consists of 4 (four) Independent Non Executive Directors, viz. Shri Moosa Raza (Chairman), Shri Rama Varma, Shri Arjan R. Gurbuxani and Smt. Aruna Makhan.
ii) The Committee specifically looks into redressing of Shareholders/Members complaints like transfer of shares, non-receipt of balance sheet, etc. The Committee ensures that the grievances of investors are attended to promptly, besides taking pro-active action for a high level of investor service. The Committee aims to focus the attention of the Company on shareholders' grievances and helps the Management in the redressal of their grievances.
iv) The Board has designated Shri Jasmin K. Bhavsar, Company Secretary & Vice President (Legal) as the Compliance Officer.
v) As per amended Clause no. 47(f) of the listing agreement, the Company has designated an E-mail address: 'share@ nirlonltd.com' for registering complaints by Members. The Company's details are displayed at the Company's website 'www. nirlonltd.com'.
iv) As certified by the Management, the Company has issued a Postal Ballot Notice dated June 20, 2015 to Members seeking their approval by way of Special Resolutions for the following business:-
1 Re-classification of Preference Shares consequent upon the alteration of the Capital Clause of the Memorandum of Association of the Company
2 Adoption of a new set of Articles of Association of the Company
3 Appointment of Shri Rahul V. Sagar as Executive Director of the Company and the payment of his Managerial Remuneration for a period of 10 months w.e.f. April 1, 2015 to January 31, 2016
The results of the Post Ballot on the above business items will be declared on August 17, 2015.
i) The Company does not have any related party transactions, which may have a potential conflict with the interests of the Company at large.
A summary statement of transactions, if any, with Related Party/ies in the ordinary course of business is placed periodically before the Audit Committee /Board.
Attention of Members is drawn to the disclosure of transactions with related parties set out in Note 2.37 of the Audited Financial Statements, forming part of this Annual Report, and the said transactions were fully disclosed at the meeting of the Board of Directors, and subsequently were approved by Members of the Company by way of Special Resolutions.
ii) As certified by the Management, the Company has complied with the requirements of regulatory authorities of the capital markets and no penalties/ strictures have been imposed against it during the last three years.
iii) The Company has laid down a Whistle Blower Policy, and no employees have been denied access to the Audit Committee.
iv) Details of compliance with mandatory requirements:
The Company has obtained the necessary Certificate from M/s. Alwyn Jay & Co, a firm of Company Secretaries in Practice regarding compliance of conditions of Corporate Governance, and the same is given as an annexure to the Directors' Report.
7 DISCLOSURE OF RISK MANAGEMENT
The Company has laid down procedures to inform Board Members about risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that the executive management controls risks through means of a properly defined framework.
8 MEANS OF COMMUNICATION:
i) Financial Results (Quarterly, Half yearly and Audited)
Quarterly, half-yearly and yearly financial results of the Company are sent to the BSE Limited within the prescribed period after they are approved by the Board. They are also published as required in the prescribed pro-forma within 48 hours of the conclusion of the meeting of the Board in which they are considered.
ii) Newspapers in which results are published
'Free Press Journal' (English daily) and 'Navshakti' (Marathi daily)
iii) Website where displayed
iv) Official News released
v) Presentations made to institutional investors/analysts
9 GENERAL SHAREHOLDER INFORMATION:
i) 56th Annual General Meeting:
Date : Monday, September 21, 2015 Time : 11.00 a.m.
Venue : Pama Thadhani Auditorium, Jai Hind College Building, 'A' Road, Churchgate, Mumbai 400 020.
ii) 57th Annual General Meeting for the year ended on
March 31, 2016
End of September 2016 (tentative)
iii) Financial Year
April 1, 2015 to March 31, 2016
iv) Board Meetings (tentative*)
• 1st Quarter of 2015-16: April - June 2015 quarter results - Meeting already held on July 29, 2015
• *2nd Quarter of 2015-16: July - September 2015 quarter results - on or before November 14, 2015
• *3rd Quarter of 2015-16: October - December 2015 quarter results - on or before February 14, 2016
• *4th Quarter of 2015-16: Audited results for the year ended March 31, 2016 - on or before May 30, 2016
v) Date of Book Closure for the 56th AGM
Friday, September 11, 2015 to Monday, September 21, 2015 (both days inclusive)
vi) Dividend Recommendation and Payment Date
Rs. 0.75 paise (7.5%) per share of Rs. 10 each
Payment Date (tentative)
The Dividend warrants will be posted/dividend amounts will be remitted/paid into Members accounts on or before October 20, 2015.
vii) Listing on Stock Exchange
The Company's paid up equity shares (9,01,18,040 equity shares of Rs. 10 each) are listed on the BSE Limited (BSE), Mumbai. The Company has paid the annual listing fee for the Financial Year 2015-16 to the BSE Limited.
viii) Payment of Annual Custodial fees
The Company has not received the annual custodial fees invoice from NSDL and CDSL till date. The Company will make payment of the same as and when the bills are received by it.
ix) Stock Script
BSE Code: 500307 and ISIN no. in NSDL and CDSL for equity shares: INE910A01012
x) Stock Market Data: April 1, 2014 to March 31, 2015
The BSE Limited, Mumbai
xi) Registrar and Share Transfer Agent (Registrar)
M/s. Sharepro Services (India) Private Limited, 13AB, Samhita Warehousing Complex, 2nd Floor, Near Sakinaka Telephone Exchange Lane, Off Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai - 400 072.
Tele : + 91 (022) 6772 0300/400 Fax : + 91 (022) 2859 1568/2850 8927 CIN No. : U67120MH2004PTC148994
Email : firstname.lastname@example.org email@example.com
Share Transfer System
The shares of the Company, being in the compulsory demat list, are transferable through the depository system. In terms of SEBI Guidelines, share transfers in Physical Form have also been shifted to the Registrar.
xv) Dematerialization of Shares
As per notification issued by SEBI, the shares of the Company are traded in Dematerialized Form. As on March 31, 2015, 91.65% of the paid-up Equity Share Capital of the Company has been dematerialized.
xii) Outstanding GDRs, ADRs, Warrants or any convertible instruments, conversion data and likely impact on equity
xiii) Industrial Park / IT Park Location & NIC code
Pahadi Village, Off the Western Express Highway, Goregaon (E), Mumbai: 400 063. NIC code: 42901
xiv)Address for Communication
Shri Jasmin K. Bhavsar, Company Secretary, Vice President (Legal) and Compliance Officer Nirlon Limited, Share Dept., Pahadi Village, Off the Western Express Highway, Goregaon (East), Mumbai: 400 063.
Tele : + 91 (022) 4028 1919 or 2685 2257/58/59 Fax No. : + 91 (022) 4028 1940
CIN No. : L17120MH1958PLC011045 E-mail : firstname.lastname@example.org Website : www.nirlonltd.com
xv) Code of Conduct
The Board has laid down a Code of Conduct for Business and Ethics for all Board Members and Senior Management of the Company.
A copy of the Code of Conduct has been displayed on the Company's website.
All Board Members and Senior Management personnel have affirmed compliance with the Code of Conduct for the Financial Year ended March 31, 2015.
A declaration to this effect is signed by the Executive Vice Chairman and Executive Director forming part of this Report.
xvi) Declaration - Code of Conduct
All Board Members and Senior Management personnel have, for the Financial Year ended March 31, 2015, affirmed compliance with the Code of Conduct laid down by the Board of Directors in terms of the listing agreement with the BSE Limited.
For Nirlon LimitedSd/-
Kunal V. Sagar Executive Vice Chairman
Sd/- Rahul V. Sagar Executive Director
Mumbai, July 29, 2015