REPORT ON CORPORATE GOVERNANCE
Revised Clause 49 of the Listing Agreement, Regulations 17 to 27, clauses (b) to (i) of Regulation 46(2) and Para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not mandatory to the Company, however, the Company has voluntarily disclosed the Compliance to the best extent possible and accordingly the Corporate Governance Report, together with the Auditors Certificate on compliance with the conditions of Corporate Governance laid down are presented in the Report on Corporate Governance for the year ended 31st March, 2016.
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE :
SADHANA NITRO CHEM LIMITED believes that transparent accounting policies, appropriate disclosures norms, best-in-class Board practices and consistently high standards of corporate conduct towards its stakeholders are essential for sustained corporate growth.
Corporate Governance is about commitment to values and ethical business conduct. The Report on the Corporate Governance is to fulfill this commitment. An Organization is able to attract investors and enhance the trust and confidence of all stakeholders by following the best governance practices.
Our Governance philosophy is based on the following :-
* Management is the trustee of the Shareholders capital and not the owner.
* Provide an enabling environment to harmonize the goals of maximizing stakeholder value and maintaining a customer centric focus.
* Have a simple and transparent corporate structure driven solely by business needs.
* Communicate externally, in a truthful manner, about how the Company is running internally.
* Make clear distinction between personal convenience and corporate resources.
* Be transparent and maintain high degree of disclosure levels in all facets of its operations.
* Satisfy the spirit of the law and not just the letter of the law.
The Company's philosophy on Corporate Governance is thus concerned with the ethics, values and morals of the Company and its directors, who are expected to act in the best interests of the Company and remain accountable to shareholders and other beneficiaries for their action.
2. BOARD OF DIRECTORS :
3. DIRECTORS' PROFILE :
Shri Asit D. Javeri (DIN : 00268114) aged 60 years, is a Science graduate from Mumbai University. He is S/o (Late) Shri Dhankumar T. Javeri, founder Chairman of the Company.
He joined company in December 1984 as a Director of the company and in January 1985, he was appointed as the Managing Director. Prior to joining the company he had experience of 9 years of running chemical company. He has been associated with the company for more than 31 years.
4. ATTENDANCE RECORD OF THE DIRECTORS :
During the Financial Year 2015-16
a) Four Meetings of Board of Directors were held on 16th April, 2015, 11th August, 2015, 10th November, 2015 & 10th February, 2016.
b) Last Annual General Meeting (AGM) was held on 11th August, 2015.
c) Extra Ordinary General Meeting (EOGM) was held NIL.
5. BOARD PROCEDURE :
Board meets once in quarter wherein they review quarterly performance and financial results. The Board meetings are generally scheduled well in advance and the notice of each meeting is given in writing to each Director. All the items on the agenda are accompanied by note giving comprehensive information on the related subject. The agenda and relevant notes are sent in advance separately to each of directors and only in exceptional cases the same is tabled at the meeting. The Board is also free to recommend the inclusion of any method for discussion in consultation with the Chairman. The information as specified in Part A of Schedule of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is regularly made available to the Board. The minutes of the Board meeting circulated in advance to all directors and confirmed at subsequent meeting. The minutes of audit committee and other committees of the board are circulated in advance to all directors regularly place before the board.
6. AUDIT COMMITTEE :
As required u/s 177 of the Companies Act, 2013 read with provisions of Clause 49 of the Listing Agreement, the Board has constituted Audit Committee which consists of the following Directors.
Powers of the Audit Committee :
The Audit Committee shall have the authority to investigate into any matter that may be prescribed under Company Law for the time being in force and within its terms of reference. Role of the Audit Committee, inter-alia, includes the following :-
1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board the appointment, re-appointment and, if required, the replacement or removal of the statutory auditors and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing with management the annual financial statements before submission to the Board, for approval with particular reference to :
a. Matters required being included in the Director's Responsibility Statement.
b. Changes, if any, in accounting policies and practices and reasons for the same.
c. Major accounting entries involving estimates based on exercise of judgment by management.
d. Significant adjustments made in the financial statements arising out of audit findings.
e. Compliance with Listing and other legal requirements relating to financial statements.
f. Disclosure of any related party transactions.
g. Qualifications in draft audit report.
5. Reviewing with the management, the quarterly financial statements before submission to the Board for approval.
6. Reviewing with the management performance of statutory and internal auditors, adequacy of the internal control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
8. Discussions with internal auditors any significant findings and follow up thereon.
9. 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.
10. Discussions with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
12. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The Audit Committee shall mandatorily review the following information.
1. Management discussion and analysis of financial condition and results of operations ;
2. Statement of significant related party transactions (as defined by the audit committee), submitted by Management ;
3. Management letters/letters of internal control weaknesses issued by the statutory auditors ;
4. Internal audit reports relating to internal control weakness; and
5. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.
Mr. V. Mohan and Mr. Arvind Mohan, V. Shankar Aiyar & Co. Partner of the firm of Statutory Auditors and Mr. Chandrashekar Iyer.
Chandrashekar Iyer & Co., Proprietor of firm of Internal Auditor, have been permanent invitees to the Audit
Committee Meetings besides Chairman & Managing Director, Chief Financial Officer and Company Secretary attended most of the meeting of the Audit Committee as invitee.
During the year, the Audit Committee, in its meetings, discussed among other things, the following :
* Reviewed with management, quarterly, half yearly and annual financial statements before submission to the Board.
* Discussed with the management and the internal and statutory auditors findings in the internal audit reports.
* Deliberated on the applicability, compliance and impact of various Accounting Standards and guidelines issued by the Institute of Chartered Accountants of India from time to time.
* Reviewed the Company's Financial and Risk Management Policies and Audit Reports covering operational, financial and other business risk areas.
The Chairman of the Audit Committee has briefed the Board of Directors, about the Audit Committees observations on various issues discussed at its meetings. Minutes of the Audit Committee Meetings are also circulated to all the Board Members along with agenda of the subsequent meeting.
All the suggestions / recommendations of the Audit Committee during the financial year 2015-16, have been accepted by the Board of Directors.
7. RISK MANAGEMENT :
The Board takes responsibility for the total process of risk management in the organisation. Results of the risk assessments and residual risks are presented to the Senior Management and the Audit Committee members. The Management is accountable for the integration of risk management practices into the day to day activities. The scope of the Audit Committee includes review of the Company's financial and risk management policies. The Audit Committee reviews the Audit Reports covering operational, financial and other business risk areas.
8. STAKEHOLDERS RELATIONSHIP COMMITTEE
Terms of Reference
* Review the existing Investors Redressal System and suggest measures for improvement.
* Review the report of Registrars and Share Transfer Agents about investor's grievances and follow up for the necessary action taken for redressal thereof.
* Suggest improvement in investor's relations.
* Consider and take on record the Certificate from Practicing Company Secretary certifying that the aggregate number of equity shares held in depositories and in physical form tally with the total number of shares issued, listed and admitted share capital.
There are two pending legal matters, in which the Company has been made a party, before any other Court(s) / Consumer Forum(s) etc., on Investors grievances.
All share transfer and correspondence thereon are handled by the Company's Registrars and Share Transfer Agents viz. Link lntime Private Limited, C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup, Mumbai 400 078
Mr. Nitin R. Jani, Company Secretary, has been appointed as the Compliance Officer, as required by the Listing Agreement entered into by the Company with Bombay Stock Exchange. He has been entrusted the task of overseeing the Share Transfer work done by the Registrars and Share Transfer Agents and attending to grievances of the Shareholders and Investors intimated to the Company directly or through SEBI and Stock Exchanges. All complaints/grievances intimated during the year have been resolved.
9. NOMINATION & REMUNERATION COMMITTEE :
The Nomination & Remuneration Committee shall have the authority to Investigate into any matter that may be prescribed under Company Law for the time being in force and shall also comply with the terms of reference as specified herein as under :
1. The Nomination & Remuneration Committee shall have meetings periodically as it may deem fit.
2. The Nomination & Remuneration Committee shall invite such of the executives to be present at the meetings of the Committee required by it.
3. The Nomination & Remuneration Committee shall have the following powers and functions :
a. To recommend to the Board, the terms and conditions of appointment of key Management personnel.
b. To seek information from any employee.
c. To obtain outside legal or other professional advice.
The Nomination and Remuneration Committee lays down the criteria for performance evaluation of independent directors and other directors, Board of Directors and Committees of the Board of Directors pursuant to the provisions of the Companies Act, 2013.
The evaluation framework for assessing the performance of Directors comprises of the following key areas :
i. Attendance of Board Meetings and Board Committee Meetings
ii. Quality of contribution to Board deliberations
iii. Strategic perspectives or inputs regarding future growth of Company and its performance
iv. Providing perspectives and feedback going beyond information provided by the management
v. Commitment to shareholder and other stakeholder interests
The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.
The Nomination and Remuneration Committee has laid down the criteria for determining qualifications, positive attributes and independence of a person proposed to be appointed as a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
This policy ensures that -
(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
11. SUBSIDIARIES :
The Company does not have any material non-listed Indian subsidiary whose turnover or net worth (i.e. paid-up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.
12. DISCLOSURES :
(a) Materially Significant related party transactions : The particulars of transactions between the Company and its related parties as per the Accounting Standard -18 are set out at Note 31 in Notes to Accounts in the Annual Report. These transactions are not likely to have any conflict with Company's interest.
(b) Management Disclosures : The Senior Management Personal have been making disclosures to the Board relating to all material, financial and commercial transactions, where they have personal interest that may have a potential conflict with the interest of the Company at large. Based on the disclosures received, none of the Senior Management Personnel has entered into any such transactions during the year.
(c) Strictures and Penalties :
There were no penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter relating to the capital markets during the last three years.
(d) Risk Management Framework :
The Board of Directors has adopted the Risk Assessment Procedure. The procedure provides an approach by the top Management to identify potential events that may affect the Company, to manage the risk within its risk appetite and to provide reasonable assurance regarding the achievement of objectives of the Company. The Senior Management priorities the risk and finalise the action plan for mitigation of the key risks.
(e) Whistle Blower Policy :
The company has a vigil mechanism and whistle blower policy under which it takes cognizance of complaints made and suggestions given by the employees and others. Even anonymous complaints are looked into and whenever necessary, suitable corrective steps are taken. No employee of the Company has been denied access to the Audit Committee the policy has been put up on the company's website (www.sncl.com)
13. MEANS OF COMMUNICATION :
The quarterly, half yearly and annual results are published in English in Financial Express and in Marathi in Mumbai Lakshadeep and are displayed on Company's website (www.sncl.com).
14. GENERAL SHAREHOLDER INFORMATION :
The current financial year of the Company is 31st March, 2016
AGM : Date, time and venue
43rd Annual General Meeting on Friday, the 12th August, 2016 at 3.00 P.M. at SHETH HIRACHAND GUMANJI TRUST HALL, HIRA BAUG, 1st Floor, Kasturba Chowk (C.P. Tank), Mumbai - 400004.
Date of Book Closure
1st August to 12th August (both days inclusive) in connection with Annual General Meeting.
Dividend payment date
NIL for financial year 2015 -16.
Financial Calendar (Tentative) Results for quarter ending
June 30, 2015 2nd week of August 2016
September 30, 2016 : 2nd week of November 2016
December 31, 2016 : 2nd week of February 2017
March 31, 2017 : 4th week of May 2017
Annual General Meeting : August, 2017
Listing of Company's shares :
The Company's shares are listed on Bombay Stock Exchange Ltd. (BSE)
Scrip Code : 506642
ISIN Number : INE888C01016
16. INVESTOR SERVICES :
The Company has appointed M/s. Link lntime India Pvt. Ltd. (LIIPL) (Formerly known as M/s. Intime Spectrum Registry Limited, whose address is given below, as its Registrar and Transfer Agents. The Registrar handles all matters relating to the shares of the Company including transfer, transmission of shares, dematerialisation of share certificates, subdivision /consolidation of share certificates and investor grievances.
LIIPL having registered office at C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup, Mumbai -400078 are Registrars and Share Transfer Agents for Physical Shares. LIIPL is also the Depository interface of the Company with both NSDL & CDSL. Their Telephone No. 022-25963838 E-mail address: email@example.com, Fax No. 022-25946969.
17. SHARE TRANSFER SYSTEM :
All the transfers received are processed by Registrar and Transfer Agents. Share transfers are registered and returned within maximum of 21 days from the date of lodgment if documents are complete in all respects. In case the shares are transferred through demat mode, the procedure is adopted as stated in Depositories Act, 1996.
18. DEMATERIALISATION OF SHARES :
The Company's shares are tradable compulsorily in electronic form. The Company has established through its Registrar and Share Transfer Agents, connectivity with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). As on 31st March, 2015, 96.71% of the equity shares have been dematerialised.
21. UNCLAIMED DIVIDEND :
The Company is required to transfer dividends which have remained unpaid / unclaimed for a period of 7 years to the Investor Education and Protection Fund (IEPF) established by the Government. The Company has already transferred the unclaimed dividend for the year ended 31st March, 2008 to the IEPF. No unpaid / unclaimed dividend remains to be transferred to IEPF since the Company has not paid any dividend after the FY 2007-08.
22. PLANT LOCATION :
Sadhana Nitro Chem Limited, 47, MIDC Industrial Area, Roha, Dist. Raigad, Maharashtra - 402 116. Tel : Dhatav -02194-263801-2-3, Fax : (91)02194-263522.
23. ADDRESS FOR CORRESPONDENCE
Sadhana Nitro Chem Limited Regd. Office : Hira Baug, 1st Floor, Kasturba Chowk (C.P Tank), Mumbai - 400 004. Tel : 022-23822524 Fax : (91)22-23887235 E-mail : firstname.lastname@example.org Website : www.sncl.com
Link lntime India Pvt. Ltd. (RTA) (Formerly known as lntime Spectrum Registry Ltd), C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup, Mumbai-400 078 Tel : 022-25963838 Fax : 022-25946969 E-mail : email@example.com
24. CEO / CFO CERTIFICATION :
The Company is duly placing a certificate to the Board from the Chairman & Managing Director and CFO in accordance with the provisions of Clause 49 (ix) of the Listing Agreement. The aforesaid certificate duly signed by the Chairman & Managing Director and CFO in respect of the financial period ended 31st March, 2016 has been placed before the Board in the meeting held on 27th May, 2016.
25. SECRETARIAL AUDIT FOR RECONCILIATION OF CAPITAL :
As stipulated by SEBI a qualified Practicing Company Secretary carries out Secretarial 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 periodically and thereon is submitted to the Listed Stock Exchanges. The audit confirms that the total Listed and Paid-up Capital is in agreement with the aggregate of the total number of shares in dematerialised form (held with NSDL and CDSL) and total number of shares in physical form.
26. CODE OF CONDUCT AND CERTIFICATE ON COMPLIANCE THEREOF :
The Board of Directors of the Company has adopted the Code of Conduct for Directors and Senior Management of the Company.
I hereby confirm that the Company has obtained from all the Members of the Board and the Senior Management Personnel, affirmation that they have complied with the Code of Conduct for the Financial Year 2015-16.
A. D. Javeri
Chairman & Managing Director
Date : 27th May, 2016.
Place : Mumbai