CORPORATE GOVERNANCE REPORT
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company's philosophy on Corporate Governance is bounded upon a rich legacy of fair ethical governance practices which has been in practice since long. Integrity, transparency, accountability and compliance with laws which are columns of good governance have always been the hallmark of the Company. The Company has consistently practised good Corporate Governance norms for the past several years for the efficient conduct of its business and meeting its obligations towards all its stakeholders.
2. BOARD OF DIRECTORS
The Board of Directors of the Company has an optimum combination of Executive, Non-Executive and Independent Directors who have in depth knowledge of business. The Board comprises of six Directors, out of which one is Executive Director and five are Non-Executive Directors including one Woman Director. Out of 6 Directors on its Board, 3 Directors are independent. The number of NonExecutive Directors (NEDs) is more than 50% of the total number of Directors. The Company is in compliance with the Clause 49 of the Listing Agreement.
As mandated by the revised Clause 49 of the Listing Agreement which has become applicable to the Company with effect from October 1, 2014, none of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees across all the Public Companies in which they are Directors. All the Directors have made necessary disclosures regarding Committee positions.
ii) Number of Board Meetings held
The Board of Directors met sixteen times during the financial year 2014-15. The dates on which the Board meetings were held are as follows:
(i) April 21, 2014 (ii) May 29, 2014 (iii) June 10, 2014 (iv) July 15, 2014 (v) August 12, 2014 (vi) September 10, 2014
(vii) September 16, 2014 (viii) September 23, 2014
(ix) October 15, 2014 (x) November 4, 2014 (xi) November 13, 2014 (xii) December 20, 2014 (xiii) February 4, 2015
(xiv) February 12, 2015 (xv) March 10, 2015 and (xvi) March 27, 2015. The maximum time gap between any two Board Meetings was 46 days.
iii) Brief Profile of Directors proposed for appointment/ re-appointment
As required under Clause-49 of the Listing Agreement, the brief resume of the Directors proposed for appointment/re-appointment and other information is furnished below:
Mr. B. N. Pasari, aged about 85 years is Director of the Company since 1980. He is matriculate and having rich experience of about 60 years in trading Business. He is a director in the following Companies viz. Amer Hotels Limited, Bishwanath Traders And Investments Ltd, Bishwanath Industries Limited, Civil Lines Properties Private Limited, Sirohi Investment Limited, Seven Star Infosoft Private Limited, Ramgarh Infotech Private Limited and Bijay Paper Traders Limited. He holds 200 Equity Shares in the Company.
Ms. Tripta Goswami, aged about 31 years is an Additional Director of the Company appointed w.e.f. March 27, 2015. She is a Non-Executive Director and is liable to retire by rotation. She is a Business Management Professional having approx. 9 years of rich experience in Imports, Exports, Logistics and Documentation. She has been handling the Import-Export functions of the Company since September, 2008. She does not hold any shares in the Company.
iv) Tenure of Independent Directors
The Company had appointed existing Independent Directors expressly under Section 149 read with Schedule IV of the Companies Act, 2013 and their tenure is fixed in accordance with the requirements laid down in the said Act and clarifications / circulars issued by the Ministry of Corporate Affairs, in this regard, from time to time. The Company issued formal letters of appointment to Independent Directors in the manner as provided in the Companies Act, 2013. The terms and conditions of appointment are disclosed on the website of the Company.
v) Performance evaluation
The Nomination and Remuneration Committee has laid down the criteria for performance evaluation of Independent Directors and the Board which capture the following points:
1. Knowledge to perform the role;
2. Time and level of participation;
3. Performance of duties and level of oversight; and
4. Professional conduct and independence.
The Board of Directors has carried out the annual performance evaluation of its own performance, the Directors individually (excluding the Director being evaluated) as well as the evaluation of the working of its Committees.
The performance evaluation of the Independent Directors was carried out by the entire Board which brought out the key attributes of the Directors, quality of interactions among them and its effectiveness.
The performance evaluation of Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department.
The Directors expressed their satisfaction with the evaluation process.
vi) Separate Meeting of Independent Directors
During the year under review, the Independent Directors met on March 10, 2015, inter alia, to discuss:
1. Evaluation of the performance of Non Independent Directors and the Board of Directors as a whole;
2. Evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the independent Directors were present at the meeting.
vii) Familiarisation Programme for Independent Directors
The Company has formulated a policy to familiarize the Independent Directors with the Company, their roles, rights and responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, operations etc. through various programmes.
The details of such familiarisation programme have been disclosed on the Company's website at www.skpmil.com <http://www.skpmil.com> at <http://www.skpmil.com/page.phpRs.page_id=32> link.
3. COMMITTEES OF THE BOARD
The Board has constituted the following Committees:
(i) Audit Committee
During the year under review, the Audit Committee was reconstituted to align with the requirements prescribed under the provisions of the Companies Act, 2013 and the revised Clause 49 of Listing Agreement. Mr. L. C. Sharma has resigned as Chairman of the Audit Committee of the Company w.e.f. April 22, 2015 and Mr. P. N. Singh has been appointed as Chairman of the Committee in his place. Mr. L. C. Sharma will remain as a member of the Audit Committee.
All the members of the Audit Committee, including Chairman, are Independent and Non-Executive Directors. All the members of Audit Committee are financially literate and have expertise in accounting/financial management. The Chief Financial Officer and Statutory Auditor attend the Audit Committee meetings. Other senior executives attend the meeting as and when invited by the Committee. The Company Secretary acts as the Secretary of the Audit Committee.
Terms of Reference :
The broad terms of reference are as under:
1. Review of financial reporting process and disclosure of financial information.
2. Review of risk management, internal control and governance process.
3. Discussions on quartely, half yearly and annual financial statements.
4. Review and recommendation of appointment, remuneration and terms of appointment of Auditors.
5. Interaction with Auditors including review of internal audit function and reports.
The Audit Committee also looks into the matters as are specifically referred to its Board of Directors besides looking into the mandatory requirements of the Listing Agreement and the provisions of the Companies Act, 2013.
The Audit Committee met Seven times during the year 2014-15 on (i) May 29, 2014 (ii) August 12, 2014 (iii) September23,2014(iv)November13,2014 (v) December20, 2014 (vi) February 12, 2015 and (vii) March 10, 2015. The necessary quorum was present at the meetings.
Committee was changed from Shareholders'/Investors' Grievance Committee to the Stakeholders' Relationship Committee. Mr. L. C. Sharma has resigned from the membership of Stakeholders' Relationship Committee and Ms. Tripta Goswami has been appointed as a member of the Committee in place of Mr. L. C. Sharma w.e.f. April 22, 2015.
This committee looks into various issues relating to shareholders/investors including transfer and transmission of shares, issue of duplicate share certificates, review of shares dematerialisation and rematerialisation, non-receipt of annual report etc.
The Committee focuses primarily on monitoring and ensuring that all shareholder and investor services operate in an efficient manner and that shareholder and investor grievances / complaints including that of all other stakeholders are addressed promptly and resolved rapidly and efficiently.
The Committee also recommends measures for overall improvement in the quality of investor services.
Ms. Sonam Katyal, Company Secretary is designated as the "Compliance Officer" who oversees the redressal of the investors' grievances.
iii) Nomination and Remuneration Committee
To align with the requirements prescribed under the provisions of the Companies Act, 2013 and the revised Clause 49 of Listing Agreement, Remuneration Committee was renamed and reconstituted as Nomination and Remuneration Committee during the year under review. Mr. L. C. Sharma has resigned from the membership of Nomination and Remuneration Committee and Ms. Tripta Goswami has been appointed as a member of the Committee in place of Mr. L. C. Sharma w.e.f. April 22, 2015.
The terms of reference of the Committee, inter alia, includes the following:
a) Identifying persons who are qualified to become Directors and who may be appointed in senior management positions in accordance with the laid down criteria;
b) Formulation of 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;
c) Formulation of criteria for performance evaluation of Independent Directors and the Board;
d) Devising a policy on Board diversity;
e) Evaluate and ensure that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talents.
During the year 2014-15, four meetings of the Nomination and Remuneration Committee were held on (i) May 29, 2014 (ii) November 13, 2014 (iii) December 24, 2014 & (iv) March 27, 2015.
The Nomination and Remuneration Committee has formulated a policy for selection of Directors and the remuneration for Directors, KMP and Senior Management. The highlights of this policy are as follows:
1. Criteria of selection of Directors
a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend his / her appointment, as per Company's Policy.
b) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has authority to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the position.
Term / Tenure
• Managing Director/Whole-time Director
The Company shall appoint or re-appoint any person as its Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.
The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution.
• Independent Director
An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms of upto maximum of 5 years each, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director.
Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.
At the time of appointment of Independent Director it should be ensured that number of Boards on which such person serves as an Independent Director is restricted to seven listed companies. Further, in case a person is serving as a Whole-time Director of a listed company, then the number of Boards on which he serves as an Independent Director is restricted to three listed companies.
• Remuneration to Managing Director / Whole-time Directors
a) The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.
b) The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.
• Remuneration to Non- Executive / Independent Directors
a) The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.
b) All the remuneration of the Non- Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.
c) An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company.
d) Any remuneration paid to Non- Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied:
i) The Services are rendered by such Director in his capacity as the professional; and
ii) In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.
e) The Compensation Committee of the Company, constituted for the purpose of administering the Employee Stock Option/ Purchase Schemes, shall determine the stock options and other share based payments to be made to Directors (other than Independent Directors).
• Remuneration to Key Managerial Personnel and Senior Management
a) The remuneration to Key Managerial Personnel and Senior Management shall consist of fixed pay and incentive pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with the Company's Policy.
b) The Compensation Committee of the Company, constituted for the purpose of administering the Employee Stock Option/ Purchase Schemes, shall determine the stock options and other share based payments to be made to Key Managerial Personnel and Senior Management.
c) The Fixed pay shall include monthly remuneration, employer's contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from time to time.
d) The Incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management, to be decided annually or at such intervals as may be considered appropriate.
(ii) Criteria of making payments to Non-Executive Directors
The Company does not pay any remuneration or sitting fee to the Non-Executive Directors. They are entitled to claim the actual out-of-pocket expenses incurred for attending Board Meetings.
Salary is paid to Ms. Tripta Goswami in her capacity as the Assistant Manager (Import & Export) and no remuneration is paid to her as a Non Executive Director of the Company.
The Management Discussion and Analysis on all the matters as specified in Clause 49 of the Listing Agreement has been included and is a part of the Annual Report.
7. RECONCILIATION OF SHARE CAPITAL
A qualified practicing Company Secretary carried out the Share Capital Reconciliation Audit to reconcile the total issued/paid up capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and in physical form for each of the quarters in the financial year ended March 31, 2015. The audit confirms that the total issued/paid up capital is in agreement with the total number of Shares in the physical form and the total number of dematerialized shares held with NSDL and CDSL.
8. CEO/CFO CERTIFICATION
The Managing Director and Chief Financial Officer (CFO) give annual certification to the Board with respect to the financial statements, internal controls and other matters, as required by Clause 49 (IX) of the revised Listing Agreement. The certificate given by the Managing Director and Chief Financial Officer (CFO) is published in this report.
9. CODE OF CONDUCT
As per the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, the Company has laid down a Code of Conduct for its Board of Directors and Senior Management. The Code of Conduct is available on the website of the Company (www.skpmil.com <http://www.skpmil.com>). All Board members and designated senior management personnel have affirmed compliance with the Code of Conduct for the financial year 2014-2015. A declaration signed by the Company's Managing Director is published in this report.
i) Means of communication
• The quarterly, half yearly and annual results are sent to Bombay Stock Exchange immediately after these are approved by the Board. Earlier, the registered office of the Company was situated in Kolkata and accordingly, results were published in Business Standard (English) and Arthik Lipi/Dainik Lipi (Bengali). After shifting of registered office in New Delhi from April 16, 2015, the results are published in The Financial Express (English) and Hari Bhoomi (Hindi).
• These results along with the Annual Report of the Company are also placed on the Company's website www.skpmil.com <http://www.skpmil.com>.
• The quarterly results, shareholding pattern, quarterly compliances and all other related communications are also filed electronically on BSE's online portal.
• The official press releases and presentations, if any, are also available on the Company's website.
ii) Insider Trading
As per SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company has adopted a Code of Conduct for Prevention of Insider Trading. All Directors and Designated Employees who could have access to the Unpublished Price Sensitive Information of the Company are governed by the Code. During the year under review, there has been due compliance with the said Code. Mr. S. K. Agarwal, Chief Financial Officer is the Compliance Officer for complying with the said code.
iii) SEBI Complaints Redress System (SCORES)
The investor complaints are processed in a centralized web based complaints redress system. The salient features of this system are: Centralised database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned Companies and online viewing by investors of actions taken on the complaint and its current status.
a) There were no materially significant related party transactions which were in conflict with the interest of the Company. All transactions entered into with the related parties were in the ordinary course of business and on an arm's length basis. The details of related party transactions during the year have been set out under Note No. 47 of Notes to Financial Statements.
Board of Directors has adopted a policy for related party transactions which has been uploaded on the website of the Company at www.skpmil.com <http://www.skpmil.com> at <http://www.skpmil.com/page.phpRs.page_id=31> link.
b) In the preparation of financial statements, the Company has followed the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 (as amended). The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.
c) There is an inter-se relationship between two Directors of the Company. Mr. N. K. Pasari, Managing Director of the Company is the son of another Director, Mr. B. N. Pasari.
d) Your Company has a systematic process for risk management which has laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls the risks through properly defined framework.
e) No strictures or penalties have been imposed on the Company by the Stock Exchanges, Securities and Exchange Board of India (SEBI) or by any statutory authority on any matters related to capital markets during the last three years.
f) Your Company has established a vigil mechanism and accordingly, a whistle blower policy has been formulated to enable the stakeholders (including Directors and Employees) to report illegal or unethical behaviour. The policy provides for adequate safeguards against victimisation of Director(s) / Employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. The details of such policy are provided on the website of the Company.
g) The Company has complied with the mandatory requirements of Clause 49 of the Listing Agreement.
12. GENERAL SHAREHOLDER INFORMATION
i) Annual General Meeting
Date : September 29, 2015
Day : Tuesday
Time : 11.00 a.m. Venue : Shikshak Sadan Surajmal Vihar Delhi - 110092
ii) Financial Year
The Company follows the period of April 1 to March 31 as the Financial Year.
iii) Financial Calendar (Tentative)
Board Meeting to take on record Schedule Results for the
* Quarter ending June 30, 2015 On or before August 14, 2015
* Quarter ending September 30, 2015 On or before November 14, 2015
* Quarter ending December 31, 2015 On or before February 14, 2016
* Quarter ending March 31, 2016 On or before May 30, 2016
iv) Book Closure Date : September 25, 2015 to September 29, 2015 (both days inclusive
v) Listing on Stock Exchanges
The Equity Shares of the Company are listed on the following two Stock Exchanges:
Name & Address of the Stock Exchanges
Bombay Stock Exchange Ltd. Floor 25, P J Towers, Dalal Street, Mumbai - 400 001
Stock Code : 500388
* The Calcutta Stock Exchange Association Ltd. Lyons Range, Kolkata - 700 001 ; 29133 7,
The Company's delisting application with Calcutta Stock Exchange is in process since long.
Note: The Company has paid the Listing Fee to Bombay Stock Exchange Ltd. Up to 2015-2016
vii) Registrar and Share Transfer Agents
M/s. Link Intime India Pvt. Ltd is the Registrar and Share Transfer Agents for the equity shares of the Company in physical and electronic form. Shareholders/Investors can direct all correspondence with regard to share transfer, transmission and change of address etc. at their following address:
M/s. Link Intime India Pvt. Ltd. 44, Community Centre, 2nd Floor, Naraina Indl. Area, Phase-I, New Delhi-110028 Ph. # 011- 41410592 to 94 Fax#011- 41410591 Email Id.: firstname.lastname@example.org <mailto:email@example.com> Contact Persons: Mr. Swapan Kumar Naskar Mr. Shamwant Kushwaha
viii) Share Transfer System
Shares received for transfer in physical form are primarily registered and returned by the Registrar and Share Transfer Agents generally within 15 days of receipt subject to the validity and completion of documents in all respects. The Share Transfer Committee also considers the demat/remat requests including share transfer/transmission matters as and when the same are forwarded by the Registrar and Share Transfer Agents.
ix) Status of Complaints/queries and their redressal as on March 31, 2015
During the year 2014-15, the Company had received 06 Complaints/queries and the same were resolved. As on date, no complaints are pending other than those, which are under litigation, disputes or court orders.
x) Pending Share Transfers
No Share transfers were pending as on March 31, 2015.
xi) Dematerialization of Shares
The shares of the Company can be traded in demat mode only. As on March 31, 2015, a total of 30,17,162 Equity Shares representing 22.31% of the total paid-up capital of the Company have been dematerialized. Members are advised to get their shares converted into demat mode.
The Company's ISIN No. : INE 970C01012
xiii) Outstanding GDRs/ADRs /Warrants etc
The Company has no outstanding GDRs/ADRs/Warrants or any convertible instruments as on March 31, 2015.
xiv) Plant Location Coating Division T-4, Old Industrial Area, Bahadurgarh Distt. Jhajjar (Haryana) Pin - 124 507