CORPORATE GOVERNANCE REPORT
(Pursuant to Clause 49 of the Listing Agreement)
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
Shilp Gravures Limited ("the Company") is committed to conduct its business in compliance with the applicable laws, rules and regulations and with the highest standards of business ethics. We, at the Company, believe that good corporate governance is a key contributor to sustainable corporate growth and creating superior value for our stakeholders. It is primarily concerned with transparency, accountability, fairness, professionalism, social responsiveness, complete disclosure of material facts and independence of Board. The Company endeavors its best to constantly comply with these aspects in values and in spirit, in addition to the statutory compliances as required under clause 49 of Listing Agreement with the Stock Exchange.
Our Corporate Governance framework has helped us to be aligned with the new guidelines of the Companies Act, 2013. We believe that an active, well-informed and independent board is necessary to ensure the highest standards of the Corporate Governance.
BOARD OF DIRECTORS:
i) Shilp Gravures Limited has an optimum combination of executive and non-executive directors on its Board. As on 31st March, 2015, the Company's Board of Directors comprised of 12 (Twelve) Directors, with a Managing Director, 2 (Two) Whole-time Directors, 3 (Three) Non - Executive Directors (including one Woman Director) and 6 (Six) Independent Directors. The Chairman of the Company is a Non-Executive Director. The composition of the Board meets the requirement of having atleast 1 (one) Woman Director and is in conformity with Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange. None of the Non - Executive Directors is responsible for the day to day affairs of the Company.
ii) The names and categories of the Directors on the Board, their attendance at the Board Meetings held during the year and the number of Directorships and committee Chairmanships held by them in other public Companies as on March 31, 2015, are given hereinbelow. The other disclosures regarding the Directorship of the Directors are as under:
• Other directorship do not include alternate directorships, directorships of private limited Companies, section 25 Companies and of Companies incorporated outside India.
• Chairmanships/ memberships of Board committees include only Audit Committee and Stakeholder's Relationship Committee.
• As required by Section 165(1) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, none of the Directors holds Directorships in more than 20 Companies (Public or Private).
• Necessary disclosures regarding committee positions in other public Companies as on March 31, 2015, have been made by the Directors.
• None of the Directors on the Board is a member of more than 10 committees or act as a Chairman of more than 5 committees across all the public Companies in which he is a Director.
• None of the Directors serve as Independent Director in more than 7 listed Companies.
• None of the Director who serves as Whole Time Director in any Listed Company serves as Independent Director in more than three Listed Companies.
The Composition of the Board, attendance at the Meetings of Board of Directors held during the year and at the last Annual
iii) During the year under review, 4 (Four) Board Meetings were held on 1st May, 2014, 26th July, 2014, 14th November, 2014 and 3rd February, 2015. The Company's last Annual General Meeting was held on 3rd September, 2014. The maximum time gap between 2 Board meetings did not exceed more than 4 months as prescribed under the Listing agreement.
The Board discusses amongst other business, the quarterly performance of the Company and financial results. The Agenda papers along with agenda notes are circulated well in advance to the Members of the Board for their review and to facilitate them to take informed decisions, if any.
iv) During the year 2014-15, information as mentioned in Annexure 1A to Clause 49 of the Listing Agreement has always been placed before the Board for its consideration at the Board Meeting.
v) Appointment / Re-appointment of Directors:
According to Articles of Association, one third of the directors retire by rotation every year and if eligible, offer himself for reappointment at the Annual General Meeting. As per Article 126 of Articles of Association, Mr. Nipam Shah will retire at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
The Company has received the notice along with the requisite deposit from member of the Company pursuant to Section 160 of the Companies Act, 2013, proposing the candidature of Dr. Baldev Patel, an Additional Director appointed to hold office upto the date of the ensuing Annual General Meeting, for the office of Director.
The Board has recommended to the shareholders the appointment / re-appointment of the aforesaid director retiring by rotation and regularizing of the Additional Director, as in the opinion of the Board, they fulfill the conditions specified in the Act for holding the office of Director. The Detailed resume of the aforesaid proposed appointees who have offered themselves for appointment / reappointment are provided in the Annexure to the Notice of the Annual General Meeting dated 8th August, 2015.
vi) Separate Meeting of Independent Directors:
As stipulated by the Code of Independent Directors under the Companies Act, 2013 and the Listing Agreement, a separate meeting of the Independent Directors was held on 21st March, 2015 to review the performance of Non-Independent Directors (including the Chairman) and the Board as a whole. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and it's Committees which is necessary to effectively and reasonably perform and discharge their duties.
vii) Induction and Training of Board Members:
On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments.
Each newly appointed Independent Director will be taken through a formal induction (familiarization) program including the presentation from the Managing Director / CEO on the Company's manufacturing, marketing, finance and other important aspects. The Company Secretary will brief the Director about their legal and regulatory responsibilities as a Director. The induction for Independent Directors will include interactive sessions with Executive Committee Members, Business and Functional Heads, visit to the manufacturing site, etc.
viii) Evaluation of the Board's Performance:
During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues, etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgement, safeguarding of minority shareholder's interest, etc.
The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the evaluation of Non-Independent Directors was carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
ix) Code of Conduct:
The Board of Directors has laid down a Code of Conduct for Business and Ethics (the Code) for all the Board members and all the employees in the management grade of the Company. The Code covers amongst other things the Company's commitment to honest & ethical personal conduct, fair competition, corporate social responsibility, sustainable environment, transparency and compliance of laws & regulations, etc. The Code has also been posted on the website of the Company www.shilpgravures.com . All the Board Members and Senior Management Personnel have confirmed compliance with the Code. A declaration to that effect signed by the Managing Director is attached and forms part of this Report.
x) Prevention of Insider Trading Code:
As per SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a code of Internal Procedure & Conduct for Regulating, Monitoring and Reporting of Trading by the Insiders for Prevention of Insider Trading. All the Specified persons who could have access to the unpublished price sensitive information of the Company are governed by this Code. The trading window will remain close during the time of declaration of results and occurrence of any material events as per the code. The Compliance officer of the Company is responsible for setting forth procedures and implementation of the code of trading in Company's securities.
3. COMMITTEES OF THE BOARD:
A. Audit Committee:
i) The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreements entered into with the Bombay Stock Exchange read with Section 177 of the Companies Act, 2013 ("Act").
iii) Four Audit Committee Meetings were held during the year. The dates on which the said meetings were held are as follows: 1st May, 2014; 26th July, 2014; 14th November, 2014; and 3rd February, 2015.
The necessary quorum was present for all the meetings.
iv) The Audit Committee invites such of the executives, as it considers appropriate particularly the head of the Finance Function, representatives of the Statutory Auditors and representative of the Internal Auditors to be present at its meetings. The Company Secretary acts as the Secretary to the Audit Committee.
v) The previous Annual General Meeting (AGM) of the Company was held on 3rd September, 2014 and was attended by Mr. Chinubhai R. Shah, Chairman of the Audit Committee.
vi) The terms of reference of the Audit Committee broadly includes:
• 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.
• 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.
• Approval of remuneration to be paid to Statutory Auditors for any other services rendered by the Statutory Auditors.
• Appointment, removal and terms of remuneration of Internal Auditors.
• Reviewing with the Management, the annual financial statements before submission to the Board for approval, with particular reference to:
- Matters 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 Management;
- Significant adjustments made in the financial statements arising out of Audit findings;
- Compliance with Listing and other Legal requirements relating to the financial statements;
- Disclosure of any related party transactions;
- Qualifications in the draft Audit Report.
• Reviewing with the Management, the quarterly financial statements before submission to the Board for approval.
• Reviewing with the Management performance of Statutory and Internal Auditors and adequacy of the internal control systems.
• 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.
• Discussions with Internal Auditors on any significant findings and follow up thereon.
• Reviewing Internal Audit Reports in relation to internal control weaknesses.
• Reviewing the findings of any internal investigation 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.
• Discussion 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.
• 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, if any.
Nomination & Remuneration Committee:
i) Constitution of Nomination & Remuneration Committee:
The Nomination & Remuneration Committee comprises of 3 members. All the members (including Chairman) of the Committee are Non-executive, Independent Directors.
The Remuneration Committee was renamed as Nomination & Remuneration Committee vide Circular Resolution and was noted by the Board of Directors of the Company on 26th July, 2014 in compliance with the provisions of the Companies Act, 2013. The Company has taken necessary steps to adequately comply with the Clause 49 of the Listing Agreement.
ii) The broad terms of reference of the Nomination & Remuneration Committee includes:
• To formulate criteria for determining qualifications, positive attributes, Independence of Directors and to evaluate the performance of the Board of Directors.
• To identify and assess 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(s).
• To determine Company's Policy on specific remuneration packages for Executive Directors as well as Non - Executive Directors including pension rights and any compensation payment.
• To support Board in evaluation of performance of all the Directors and in annual self-assessment of the Board's overall performance.
• To conduct annual performance of all the Directors, Committees and also the Senior Management Employees
• To formulate a policy relating to remuneration for the Directors, Committee and also the Senior Management Employees.
• Such other matters as the Board may from time to time request the Nomination & Remuneration Committee to examine and recommend/ approve.
Two meetings of the Nomination & Remuneration Committee were held during the year on 26th July, 2014 and 3rd February, 2015. Necessary quorum was present at the meetings held.
iv) The Company does not have any Employee Stock Option Scheme.
v) Remuneration Policy:
The Company's remuneration policy is driven by the success and performance of the individual employee and the Company. Through its compensation programme, the Company endeavors to attract, retain, develop and motivate a high performance workforce.
• Remuneration to Whole-time / Executive / Managing Director(s)
The Company pays remuneration by way of salary, benefits & perquisites and allowances to its Managing Director and the Executive Directors. An annual increment are decided by the Nomination & Remuneration Committee out of the profits of the Company, based on the performance of the Company as well as that of the Managing Director and each Executive Director, which is within the salary scale approved by the Members and are effective from 1st July every year.
• Remuneration to Non-Executive / Independent Directors
The Non-executive Independent Directors of the Company shall be paid sitting fees as per the applicable Regulations and shall also be paid to Non-executive Non Independent Directors, provided he / she is not in receipt of any remuneration or commission from the Company on regular basis. The quantum of sitting fees will be determined as per the recommendation of Nomination and Remuneration Committee and approved by the Board of Directors of the Company. Further the boarding and lodging expenses shall be reimbursed to the Directors based out of Ahmedabad.
The profit-linked Commission shall be paid within the monetary limit as recommended by the Board and approved by the shareholders of the Company.
Pursuant to the provisions of the Act, an Independent Director shall not be entitled to any stock option of the Company. Only such employees of the Company and its subsidiaries as approved by the Nomination and Remuneration Committee will be granted ESOPs.
• Remuneration to KMP / SMP / other Employees
Remuneration of employees largely consists of basic remuneration and perquisites. The components of the total remuneration varies based on the grades and are governed by industry patterns, qualification and experience of the employee, responsibilities handled by him, his individual performance, etc.
• Non-Executive Directors:
During the year 2014-15, the Company has paid sitting fees of X 15,000/- per meeting to its Non - Executive Directors for attending meetings of the Board of Directors and Audit Committee meetings whereas X 10,000/- per meeting were paid for attending the meetings of Stakeholders' Relationship Committee and Nomination & Remuneration Committee of the Company.
Stakeholders' Relationship Committee:
i) Constitution of Stakeholder's Relationship Committee:
The Company has a Stakeholders' Relationship Committee of Directors to look into the redressal of complaints of investors such as transfers or credit of shares, non - receipt of dividends/ notices/ annual reports, etc. and take necessary steps for redressal thereof. The Company has taken necessary steps to adequately comply with the Clause 49 of the Listing Agreement.
The Shareholder's Grievance Committee was renamed as Stakeholder's Relationship Committee vide Circular Resolution and was noted by the Board of Directors of the Company on 26th July, 2014 in compliance with the provisions of the Companies Act, 2013.
ii) One meeting of the Stakeholders' Relationship Committee was held during the year on 1st May, 2014. Necessary quorum was present for the meeting.
The Company Secretary is designated as the Compliance officer and Secretary of the Committee.
The Board has delegated the powers to approve transfers of shares / transmissions to Company Secretary and one Senior Executive of the Company.
iv) Name, designation and address of Compliance Officer:
Ms. Gurnish Chhabda Company Secretary Shilp Gravures Limited,
778/6 Pramukh Industrial Estate, Sola-Santej Road, Village: Rakanpur, Tal. Kalol, Dist. Gandhinagar-382 721, Gujarat, India Email: email@example.com M.: +91 99252 46511, Tel.: 02764 - 286323, Fax: 02764 - 286335
i) During the year the Company has constituted a CSR Committee as required under Section 135 of the Companies Act, 2013.
iii) One meeting of the CSR Committee was held during the year on 14th November, 2014. Necessary quorum was present for the meeting.
iv) The broad terms of reference of the CSR Committee includes:
• To frame the CSR Policy and its review from time - to - time.
• To ensure effective implementation and monitoring of the CSR activities as per the approved policy, plans and budget.
• To ensure compliance with the laws, rules & regulations governing the CSR and to periodically report to the Board of Directors.
v) The CSR Report for the year ended March 31, 2015 is attached as an Annexure to the Board's Report.
i) Related Party Transactions
There were no materially significant related party transactions that may have conflict with the interest of the Company. The related party transactions which are disclosed in the Notes to Financial Statements for the year 31st March, 2015, are non-material in nature..
The Board has approved a policy for related party transactions and which has been uploaded on the Company's website. The web-link as required under Listing Agreement is as under:
Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to Capital markets, during the last three years : Nil
iii) Whistle Blower Policy
The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a vigil mechanism and Whistle Blower Policy under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. The reportable matters may be disclosed to the Ethics and Compliance Task Force which operates under the supervision of the Audit Committee. Employees may also report to the Chairman of the Audit Committee. During the year under review, no employees were denied to access to the Audit Committee. The Whistle Blower Policy is placed on the website of the Company and web-link to the same is as under-<http://www.shilpgravures.com/pdf/Whistle%20Blower%20Policy.pdf>
iv) The compliance with regard to the Mandatory requirements and adoption of Non-mandatory requirements of Clause 49 are specified hereunder:
The Company complies with all the mandatory requirements of Clause 49 of the Listing Agreement on Code of Corporate Governance. A Certificate from the Statutory Auditors of the Company to this effect has been included in this Report
Non- Mandatory Requirements:-
The status of compliance with non-mandatory recommendations of the Clause 49 of the Listing Agreement with Stock Exchange is provided below:-
a) Shareholders' Rights : As the quarterly and half yearly financial performance are published in the newspapers and are also posted on the Company's website, the same are not being sent to the shareholders.
b) Audit Qualifications : The statutory financial statements of the Company are unqualified.
Separate posts of Chairman and CEO : The Chairman of the Board is a Non-executive Director and his position is separate from that of the Managing Director & CEO. d) Reporting of Internal Auditor : The Internal Auditor reports to the Audit Committee.
Disclosure Of Accounting Treatment
The Company had followed all the relevant Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 while preparing Financial Statements.
Disclosure of relationships between the Directors inter-se None of the Directors have any relationships inter-se.
The Audit Committee reviews the consolidated financial statements of the Company. The minutes of the Board meetings alongwith a report on significant developments of the unlisted subsidiary Companies are periodically placed before the Board of Directors of the Company.
MEANS OF COMMUNICATION:
i. Quarterly results
The quarterly, half yearly and annual results of the Company are published in leading newspapers in India
ii. Newspapers wherein results are normally published
"Indian Express" in English "Financial Express" in local language, i.e. Gujarati editions
iii. Website, where displayed "www.shilpgravures.com "
iv. Displays official news releases Yes
v. The presentations made to institutional investors or to the analysts No
GENERAL SHAREHOLDER INFORMATION:
i) Corporate Identification Number :
ii) Annual General Meeting :
Date : 23rd September, 2015
Time : 4:00 p.m.
Venue : 778/6, Pramukh Industrial Estate, Sola-Santej Road, Village Rakanpur, Tal. Kalol, Dist. Gandhinagar-382 721, Gujarat
iii) Financial Calendar :
Year ending : March 31 AGM in : September
iv) Book Closure :
Saturday, the 19th day of September, 2015 to Wednesday, the 23rd day of September, 2015
(both days inclusive).
v) Dividend Payment Date :
i) Dividend, if declared will be paid to:
(a) The members in respect of shares held in physical form, after giving effect to all valid transfers of shares in physical form lodged with the Company on or before the close of business hours on 18th September, 2015.
(b) The members whose names will appear on the statement of beneficial ownership furnished by NSDL and CDSL at the end of business hours on 18th September, 2015, in respect of shares held in Demat form.
ii) Dividend warrants / Demand Drafts made payable on or after 23rd September, 2015 will be posted to members at their registered address.
vi) Listing on Stock Exchanges:
The Company's shares are listed at Bombay Stock Exchange (BSE).
The Company has paid the Listing fee for the year 2015-2016 to the Stock Exchange.
vii) Stock Code/ Symbol:
Stock Code : 513709
Stock Symbol : SHILGRAVQ
ISIN : INE960A01017
ix) Registrar and Share Transfer Agent:
Name and Address : M/s. Sharepro Services (India) Private Limited
416 - 420, 4th Floor, Devnandan Mall, Opp. Sanyas Ashram, Ellisbridge, Ahmedabad - 380 006, Gujarat, India Telephone : 079 - 2658 2381/ 2/ 3
Email : firstname.lastname@example.org Website : www.shareproservices.com
x) Share Transfer System:
Share Transfer Agent attends to the share transfer work once in a fortnight and shares are transferred if the documents are clear in all respects. Requests for Issue of Duplicate Shares / Fresh Share Certificate / Transmission / Consolidation of Shares are under the authority of Company Secretary. Pursuant to clause 47(C) of the listing agreement with the Stock Exchange, certificate on half yearly basis, has been issued by a Company Secretary in Practice for due compliance of share transfer formalities.
All requests for dematerialisation of shares are processed and the confirmation is generally given to the Depositories within 15 days. Pursuant to SEBI directive, certificate on quarterly basis is received from Company Secretary in Practice for timely dematerialisation of shares and reconciliation of the share capital of the Company.
xii) Plant Location:
The Company's plant is located at:
Factory & Registered Office: Shilp Gravures Limited
778/6, Pramukh Industrial Estate, Sola-Santej Road, Village Rakanpur, Taluka Kalol, Dist. Gandhinagar - 382 721, Gujarat, India. The factory and the registered office of the Company's subsidiary company is located at -
Re Shilp Equipments (India) Private Limited
3 - 4, Raghuvir Industrial Estate, Nr. Kothari Cross Road, Village: Santej, Tal. Kalol, Dist. Gandhinagar - 382 721, Gujarat, India
xiii) Address of Correspondence: Shilp Gravures Limited
778/6 Pramukh Industrial Estate, Sola - Santej Road, Village Rakanpur, Tal. Kalol, Dist. Gandhinagar - 382 721, Gujarat, India Tel. No.: +91 2764 286323, Fax No. : +91 2764 286335
Designated e-mail address for Investor Services: email@example.com > Website: www.shilpgravures.com
On the behalf of the Board of Directors
Baldev Patel (Chairman)
Ambar Patel (Managing Director)
Date : 08.08.2015