CORPORATE GOVERNANCE REPORT
The detailed report on Corporate Governance as per the format prescribed by SEBI and incorporated in Clause 49 of the Listing Agreement is set out below:
A. COMPANY’S PHILOSOPHY
The Company believes that good Corporate Governance practice enhances the value for all stakeholders.
The Company is committed to the adherence of all compliances in its true spirit at all times and the adoption of the best practices conducive to maintaining good governance. The Board of Directors fully supports and endorses Corporate Governance practices as enunciated in Clause 49 of the Listing Agreement as applicable from time to time.
B. BOARD OF DIRECTORS
The Board of Directors (“the Board”) of your Company is responsible for and is committed to sound principles of the corporate governance in the Company. The Board plays a crucial role in overseeing how the management serves the interest of the Shareholders and other Stakeholders. This belief is reflected in our governance practice, under which we strive to maintain an effective, informed and independent Board to ensure best practice.
> Board Meetings and Attendance
During the year ended March 31. 2015. Seven (7) Board Meetings were held on 29th May. 2014; 25th July. 2014; 14th August. 2014; 27th August. 2014; 14th November. 2014; 13th February. 2015 and 30th March. 2015.
C. COMMITTEES OF BOARD
Currently, your Company has three Board Committees. They are - Audit Committee, Nomination & Remuneration Committee and Shareholders' Grievances Committee.
The Board Committees play a vital role in strengthening the Corporate Governance practices and focus effectively on the issues and ensure expedient resolution of the diverse matters.The terms of reference of these Committees are determined by the Board from time to time. Meeting of each Board Committee is convened by the respective Committee Chairman. The signed minutes of the Committee Meetings are placed before the Board for information and noting. Matters requiring Board's attention are generally discussed with the Board members.The Chairman of the Committee generally apprise the Board about the recommendations and discussions held in the Committee Meeting. The role and composition of these Committees including the number of Meetings held during the FY and their respective attendance details are provided below.
I. Audit Committee
> Broad Terms of Reference
The terms of reference of this Committee are quite comprehensive and are in conformity with the provisions of Clause 49 (III) of the Listing Agreement as well as Section 177 of the Companies Act, 2013. The terms of reference of the Audit Committee include the following:
The broad terms of reference and functions of the Audit Committee are as follows:
i) Overseeing of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements is correct, sufficient and credible;
ii) Recommending to the Board the appointment, re-appointment and removal of statutory auditors, internal auditors and fixation of their remuneration;
iii) Fixing and approving the payments to statutory auditors for any other services rendered by them;
iv) Reviewing with management the annual financial statements and auditor's report before submission to the Board for approval, focusing primarily on:
- Matters required to be included in the Director's Responsibility statement to be included in the Board Report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013;
- Any changes in accounting policies and practices and reasons for the same;
- Major accounting entries involving estimates based on exercise of judgments by management;
- Qualifications in draft audit report;
- The going concern assumption;
- Significant adjustments made in the financial statements arising out of audit;
- Compliance with listing and legal requirements concerning financial statements;
- All related party transactions i.e., transactions of the Company of material nature, with promoters or the management, their subsidiaries or relatives etc.
v) Reviewing the quarterly and half yearly financial statements and recommendation of the same to the Board;
vi) Reviewing with the management, statutory and internal auditors, internal financial controls and risk management system;
vii) 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 utilised for purposes other than those stated in the offer document/prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board;
viii) Reviewing the adequacy of internal audit functions, 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;
ix) Review and monitor the auditor's independence and performance, and effectiveness of audit processes;
x) Scrutinizing of the inter corporate loans & investments;
xi) Discussion with Internal Auditors, any significant findings and follow up thereon;
xii) 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;
xiii) Approval or any subsequent modification of transactions of the Company with related parties;
xiv) To look into reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors;
xv) To review the functioning of the Whistle Blower and Vigil mechanism;
xvi) Valuation of undertaking or assets of the Company where ever it is necessary;
xvii) 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 and background, etc. of the candidate;
xviii) Evaluation of internal financial controls and risk management systems;
xix) Reviewing statement of significant related party transactions and Management Discussion and analysis of financial condition and results of operations;
xx) Discussing with Statutory Auditors about the nature and scope of audit before the commencement of audit as well as post audit discussion to ascertain any area of concern;
xxi) All such other functions as may be specified from time to time.
The Audit Committee is empowered pursuant to its terms of reference:
i) Investigation of any activity within its terms of reference;
ii) Seeking information from any of the employees while investigating;
iii) Obtaining outside legal or other professional advice on any matter as it may consider necessary.
Minutes of meetings of the Audit Committee are circulated to members of the Committee, Board and the invitees and are being noted at the subsequent Meeting of the Committee.
> Composition & Attendance
The Audit Committee of the Company comprises three Directors, of which, the Chairman is a NonExecutive Independent Director nominated by the Board and the remaining two Members are executive Directors. All these Directors are financially literate and possess adequate knowledge of corporate finance, accounts and Company Law. Statutory & Internal Auditors are invitees to the Meetings.
During the period ended 31st March, 2015, Five (5) Meetings of Audit Committee were held on 29th May 2014; 14th August 2014; 27th August, 2014; 14th November 2014 and 13th February 2015.
II. Stakeholders' Relationship Committee
In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement, the Committee has been renamed from the existing "Stakeholders' Grievances Committee" to the "Stakeholders' Relationship Committee" and the same been reconstituted.
The Committee oversees all the matters relating to Shareholders'/Investors' grievances/complaints and is empowered to perform the following functions on behalf of the Board in relation to handling of Shareholders/Investors' Grievances. The Committee consists of three members, chaired by a Non-Executive Independent Director.
The terms of reference and functions of the Committee are as under:
i) Timely redressal of grievances of shareholders/ investors of the Company;
ii) Overseeing transfer and transmission of securities;
iii) Handling and disposing complaints related to transfer of shares, non-receipt of declared dividend, non receipt of Annual reports, any information sought by shareholders, etc.;
iv) Issuance of duplicate shares certificates;
v) Review of dematerialization of shares and related matters;
vi) Monitoring implementation and compliance with the Company's Code of Conduct for Prohibition of Insider Trading in pursuance of SEBI (Prohibition of Insider Trading) Regulations, 1992;
vii) Performing various functions relating to the interests of shareholders/investors of the Company as may be required under the provisions of the Companies Act, 2013, Listing Agreement with the Stock Exchanges and regulations/guidelines issued by the SEBI or any other regulatory authority.
> Composition & Attendance
During the year ended March 31, 2015, Four (4) Committee Meetings were held on 29th May 2014; 14th August 2014; 14th November 2014 and 13th February 2015.
The constitution of the Stakeholder's Relationship Committee is as under:
> Shareholders'/Investors' Redressal
During the period under review, the Company did not receive any complaints for non-receipt of transferred Share Certificates, Annual Reports, Warrants etc. and hence no complaints outstanding as on 31st March, 2015. The Company had received communications during the year from three Shareholders for physical Annual Reports which were in nature of request rather than complaints, to whom the Company had duly sent the Annual Reports. To expedite the processing of complaints, the Board has delegated necessary powers to the Registrar and Share Transfer Agents viz. M/s. Adroit Corporate Services Private Limited.
III. Nomination & Remuneration Committee
The Remuneration Committee was renamed as Nomination & Remuneration Committee in terms of Listing Agreement and Companies Act, 2013 during the year.
> The Broad terms of reference and functions of the Nomination and Remuneration Committee are as follows:
i) Identifying persons qualified to become Directors and can be appointed in Senior Management in accordance with the criteria as may laid down and recommend their appointment or removal to the Board at any point of time;
ii) Formulation of the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
iii) Recommend to the Board appointment or reappointment of Directors and appointment of Key Managerial Personnel;
iv) Performance evaluation of every Director;
v) Formulation of criteria for evaluation of Independent Directors and the Board;
vi) Fixation of salary, perquisites and commissions etc. to the Directors of the Company.
> Composition & Attendance
During the year ended March 31, 2015, Two (2) Committee Meetings were held on 29th May, 2014 and 30th March, 2015.
> Details of Sitting Fees paid to Non-Executive Independent Directors for the year ended 31st March, 2015:
The Non-Executive and Independent Directors are paid sitting fees for each meeting of the Board and the Committee thereof which is decided by the Board and are within the limits as prescribed under Companies Act, 2013.
> Remuneration to the Executive Directors for the Accounting Year 2014-2015:
The appointment and remuneration of the Whole-time Director and Executive Directors is governed by the resolutions passed by the Committee and the Board of Directors and Shareholders of the Company, as may be applicable. Remunerations paid to the Whole-time Director and Executive Directors are recommended first by the Committee, and then approved by the Board of Directors and thereafter by members in General Meeting etc, as applicable.
During the year, Mr. Pankaj Dave, Managing Director and Mr. Tilokchand Kothari, Executive Director have not drawn any remuneration from the Company.
D. INDEPENDENT DIRECTORS MEETING
During the year, the Independent Directors met on 29th December, 2014, inter alia, to discuss:
i) Evaluation of the performance of Non-Independent Directors and the Board of Director as a whole;
ii) Evaluation of performance of Chairperson of the Company;
iii) Assessing the quality, content and timelines of flow of information between the Management and the Board to effectively and reasonably perform its duties.
E. PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board. Evaluation procedure covered various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was carried out by the entire Board.
> Performance Evaluation of the Chairman
The Independent Directors are responsible for the performance evaluation of the Chairman. They also take into account the views of Executive/other Directors on the Board. It was one of the matters which were discussed in Meeting of the Independent Directors held on 29th December, 2014.
> Compliance Officer
Mr. Pankaj Dave is the Compliance Officer in terms of Listing Agreement executed by the Company with the Stock Exchange.
F. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company familiarizes its Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes. These include orientation programme upon induction of new Directors, as well as other initiatives to update the Directors on a continuing basis.
The Familiarisation programme for Independent Directors is disclosed on the Company's website at <http://www.shalimarpro.com/attachments/FamiliarizationProgrammeIndependentDirectors.pdf>.
G. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Whistle Blower Policy and Vigil Mechanism provides a channel to the employees to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy and also provides for adequate safeguards against victimization of employees by giving them direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any reported under this Policy will be appropriately and expeditiously investigated by the Chairman.
The Policy covers malpractices and events which have taken place / suspected to have taken place, misuse or abuse of authority, fraud or suspected fraud, violation of Company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is affected and formally reported by whistle blowers concerning its employees.
Your Company hereby affirms that no Director/ employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.
The Whistle Blower Policy is of the Company is also posted on the website of the Company
H. RISK MANAGEMENT
The Company has procedures to inform Board of Directors about risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through the means of properly defined framework. Your Company had framed a policy which can be viewed on the website of the Company - www.shalimarpro.com <http://www.shalimarpro.com> in the "Investors Section".
a. Code of Conduct
The Board of Directors of your Company had adopted and laid down a code of conduct for all Board members and Senior Management of the company. The code of conduct is available on the website of the company - <http://www.shalimarpro.com/>attachments/codeofconduct.pdf All Board members and senior management personnel have affirmed compliance with the Code of Conduct. The Managing Director has also confirmed and certified the same (the certification is enclosed at the end of this report).
b. Materially significant related party transactions which may have potential conflict with the interests of the Company at large
During the year ended 31st March 2015, No transaction have been entered into by the Company with the related parties during the year. A Policy determining the Related Party Transactions is uploaded on the website of the Company at <http://www.shalimarpro.com/attachments/policyrtp.pdf>
c. Details of non-compliances, penalties, strictures imposed on the Company by Stock Exchange/ SEBI/Statutory Authorities on any matter related to Capital Markets during last three years:
The Company has complied with the requirements of the Stock Exchanges/SEBI/and other Statutory Authorities on all matters related to Capital Markets during the last three years. No penalties or strictures have been imposed on the Company by the Stock Exchange or SEBI or any other statutory authorities.
d. Whistle Blower Policy
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 14th November, 2014, approved and adopted the Whistle Blower Policy. This Policy can be viewed on the Company's website viz.
<http://www.shalimarpro.com/attachments/VIGILMechanism.pdf>. Your Company further affirms that no person shall be denied access to the Audit Committee.
e. Subsidiary Companies
The Company does not have any subsidiary Company during the Year under review.
f. Reconciliation of Share Capital Audit
As stipulated by Securities and Exchange Board of India (SEBI), Statutory Auditor of the Company carries out the Reconciliation of Share Capital 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 every quarter and the report thereon is submitted to Stock Exchange and is also placed before the Board of Directors. No discrepancies were noticed during these audits.
g. Adoption of Insider Trading Policy
The Company has implemented a policy prohibiting Insider Trading in conformity with applicable regulations of the Securities Exchange Board of India ("SEBI"), which has been laid down for employees, connected persons and persons deemed to be connected, while trading in the securities of the Company. The policy lays down procedures to be followed and disclosures to be made while dealing with shares of the Company and cautioning them of the consequences of violations. The Code of Conduct for Insider Trading is adopted by the Board and uploaded on the website of the Company viz. <http://www.shalimarpro.com/attachments/>codei.pdf.
h. Disclosures of Accounting Treatment in preparation of Financial Statements
The Company has followed the Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI), in preparation of its Financial Statements.
i. Proceeds from Public Issues, Rights Issue, Preferential Issue etc.
The Company has not issued any shares or securities during the year ended 31st March, 2015 and has not raised any Money through Public Issue, Rights Issue, Preferential Issue etc, during the said period.
j. Compliance with mandatory requirements of Clause 49
The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement relating to Corporate Governance.
k. Non-Mandatory Requirements
i) Shareholder Rights:
As the Company's quarterly/half yearly/yearly results are published in English newspapers having circulation all over India and in Marathi newspapers widely circulated in Maharashtra, the same are not sent to each household of shareholders.
ii) Audit Qualifications:
There is no audit qualification in the Company's financial statements for the year ended on 31st March, 2015. The Company continues to adopt best practices to ensure the regime of unqualified financial statements.
iii) Reporting of Internal Auditor:
M/s. RNA & Associates, Chartered Accountants, Mumbai (Firm Registration No. 136734W) was appointed as Internal Auditor of the Company for the FY 2014-2015 and the Internal Audit Report prepared by them was placed before the Audit Committee.
L. MANAGEMENT DISCUSSION AND ANALYSIS
A statement of Management Discussion and Analysis is appearing elsewhere in this Annual Report in terms of the requirement of the Code of Corporate Governance.
M. MEANS OF COMMUNICATION
The unaudited as well as audited quarterly, half yearly & yearly results are forthwith communicated to all the Stock Exchange with whom the Company has listing agreement as soon as they are approved and taken on record by the Board of Directors of the Company. Further the results are published in the newspapers, viz. The Free Press Journal, English daily circulated all over India and Navshakti, Marathi daily having regional circulation. The unaudited & audited results and Shareholding Pattern are also displayed on the website of the Company - <http://www.shalimarpro.com/> shortly after its submission to the Stock Exchange.
The Section on "Investor Relations" on the website serves to inform the shareholders, by giving complete financial details, shareholding pattern, information relating to Stock Exchange, Registrars, and Share Transfer Agents among others. The Company's email id - firstname.lastname@example.org is dedicated for prompt redressal towards shareholders' queries, grievances etc. The Company is committed to provide all stakeholders all such information as may be necessary to them to make an informed decision.
N. CEO/ CFO CERTIFICATION
The CEO and CFO certification of the financial statements for the period ended March 31, 2015 is provided in the CEO & CFO certification section of the Annual Report.
O. GENERAL SHAREHOLDERS INFORMATION:
Annual General Meeting
Date 30th September, 2015
Time 01.00 p.m.
Venue: 1008/1009, Gold Crest Centre, L T Road, Borivali - West, Mumbai - 400 092
April 2015 to March 2016 (Tentative)
Financial reporting for the quarter ending June, 2015 :On or before 14th August, 2015
Financial reporting for the quarter ending September, 2015 :On or before 14th November, 2015
Financial reporting for the quarter ending December, 2015 :On or before 14th February, 2016
Financial reporting for the quarter ending March, 2016 :On or before 29th May, 2016
* Date of Book Closure
24th September, 2015 to 30th September, 2015(Both Days Inclusive for the purpose of AGM)
From 10.00 a.m. (IST) on 27th September, 2015To 5.00 p.m. (IST) on 29th September, 2015
* Registered Office
A-9, Shree Siddhivinayak Plaza, Plot No. B-31,Off Link Road, Andheri (West), Mumbai- 400053
Tel : 022- 6550 1200
*Listing on Stock Exchange
The Stock Exchange, Mumbai
* BSE Stock Code
*Corporate Identification Number (CIN)
* ISIN INE435E01020
* Plant Location
The Company has a trading business which is operated from the Registered Office; hence the information about plant location is not applicable.
> Registrar and Share Transfer Agent
Adroit Corporate Services (P) Ltd.
19/20 , Jafferbhoy Industrial Estate, 1st floor, Makwana Road,
Marol Naka, Andheri (East), Mumbai - 400 059. Tel.No. 42270400/2850 3748 Email id: email@example.com Website www.adroitcorporate.com
> Share Transfer System:
Share certificates received for transfer in physical form and requests for Demat are generally registered / confirmed within 30 days of receipt of the same, provided documents are clear in all respects. A summary of transfers/ transmission of securities of the Company from the Registrar and Transfer Agent is placed before every Stakeholders' Relationship Committee Meeting.
> Outstanding GDRs/ADRs/Warrants or any convertible instruments:
The Company has not issued any GDR/ADR/Warrants etc.
> De-materlisation of Shares and Liquidity
As on March 31, 2015, over 99.86% of the total Equity Shares issued by the Company were held in de-materialised form.
As provided under Clause 49 of the Listing Agreement with the Stock Exchange, it is hereby declared that all the Board Members and Senior Management personnel of the Company have affirmed the compliance with Code of Conduct of Shalimar Productions Limited for the year ended 31st March, 2015.
By Order of the Board of Directors
For Shalimar Productions Limited
Sd/- (Pankaj Dave)