CORPORATE GOVERNANCE REPORT FOR THE YEAR 2014-2015
The Directors present the Company's Report on Corporate Governance for the year ended March 31, 2015.
CORPORATE GOVERNANCE PHILOSOPHY:
Corporate Governance primarily involves transparency, full disclosure, independent monitoring of the state of affairs and being fair to all stakeholders and is a combination of voluntary practices and compliance with laws and regulations. The Corporate Governance Code has also been incorporated in Clause 49 of the Listing Agreement.
The Company endeavors not only to meet the statutory requirements in this regard but also to go well beyond them by instituting such systems and procedures as are in accordance with the latest global trends of making management completely transparent and institutionally sound. The Company has professionals on its Board of the Directors who are actively involved in the deliberations of the Board on all important policy matters.
Your Directors view good Corporate Governance as the foundation for honesty and integrity and recognize their fiduciary accountability to the shareholders. They are committed to continue the vigilance on these matters to maintain your trust.
It has been, and continues to be, the policy of your Company to comply with all laws governing its operations, to adhere to the highest standard of business ethics and to maintain a reputation for honest and fair dealings. Your Board of Directors recognizes its responsibility to oversee and monitor management and the Company's activities to reasonably assure that these objectives are achieved.
It is paramount that the Company's reputation for integrity and credibility remain at the highest standards for the benefits of all stakeholders, employees, customers and suppliers.
CODE OF CONDUCT:
In compliance with the requirements of Clause 49 of the Listing Agreement, the Company has adopted a Code of Conduct for Directors as well as for Senior Management. All Board members and Senior Management personnel have affirmed compliance with the applicable Code of Conduct. The policies as well as codes are posted on the website of the Company.
BOARD OF DIRECTORS:
The composition of the Board of Directors, their attendance at the Board meetings held during the financial year ended 31.03.2015 and the last Annual General Meeting along with the number of Directorship and memberships held in various Committees in other Companies as on the date of this Report, are given in the tables below.
The Board of Directors oversees the overall functioning of the Company. The Board provides and evaluates the strategic direction of the Company management policies and their effectiveness and ensures that the long term interests of the stakeholders are being served. The whole –time Director is assisted by the senior management personnel in overseeing the functional matters of the Company
The Board Meetings of the Company are scheduled in advance and the notice of each such Board Meeting is given in writing to all the Directors. Detailed agenda together with the relevant annexure is also sent to the Directors in advance.
However, in special and exceptional circumstances, additional or supplementary items on the agenda are allowed to be considered with the permission of Chair. All the departments in the Company communicate with the Company Secretary in advance with regard to the matters requiring the approval of the Board to enable inclusion of the same in the agenda for the Board Meeting. The Members of the Board are also free to recommend inclusion of any matters in the agenda for discussion.
Whenever necessary, additional meeting are held. In case of business exigencies or urgency of matters, resolutions are passed by circulation.
Important decisions are taken at the Board / Committee meeting are promptly communicated to the Concerned departments /divisions , Action taken report on the decision of the previous meeting (s) is placed at the immediately succeeding meeting of the Board / Committee(s) for information and review of the Board / Committee(s).
MEETING OF INDEPENDENT DIRECTORS:
In terms of requirements of the Companies Act 2013, Rules framed there under and Clause 49 II B (6) of the Listing Agreement, a separate meeting of Independent Directors was held on February 2, 2015.
The Board of Directors at its meeting held on August 12, 2014, revised the terms of reference of the Committee to meet the requirements of the Companies Act, 2013.
The revised and enhanced scope of the Committee is as follows:
Powers of the Audit Committee:
a) To investigate any activity within its terms of reference or such matter as may be referred to it by the Board and for this purpose obtain professional advice from external sources and have full access to information contained in the records of the Company;
b) To seek information from any employee;
c) To obtain outside legal or other professional advice; and
d) To secure attendance of outsiders with relevant expertise, if it considers necessary;
Role of the Audit Committee:
1) Over-seeing the Company's financial reporting process and the disclosure of its financial information to ensure that the Company's financial statement is correct, sufficient and credible;
2) Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
3) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4) Approval of the Company's policy on determining materiality of related party transactions and also on dealing with related party transactions;
5) Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to:
(a) matters required to be included in the director's responsibility statement to be included in the Board's report in terms of section 134(3)(c) of the 2013 Act;
(b) changes, if any, in accounting policies and practices and reasons for the same;
(c) major accounting entries involving estimates based on the 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 the financial statements;
(f) disclosure of any related party transactions; and
(g) qualifications in the draft audit report;
6) Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
7) Reviewing and monitoring the auditor's independence and performance, and effectiveness of the audit process;
8) To call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of the financial statement before their submission to the Board and discuss any related issues with the internal and statutory auditors and the management of the Company.
9) Approval or any subsequent modification of transactions of the Company with related parties in accordance with the Company's policy on related party transactions;
10) Scrutiny of inter-corporate loans and investments;
11) Valuation of undertakings or assets of the Company, wherever it is necessary, in consultation with external professional advisors, as deemed fit by the Audit Committee;
12) Evaluation of internal financial controls and risk management systems of the Company;
13) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems of the Company;
14) 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;
15) Discussion with internal auditors of any significant findings and follow up thereon. To formulate the scope, functioning, periodicity and methodology for conducting the internal audit in consultation with the Internal Auditor;
16) 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;
17) Discussion with statutory auditors before the commencement of audit, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
18) Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
19) 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;
20) To review the functioning of the whistle blower mechanism and the vigil mechanism instituted by the Company. The vigil mechanism to provide for adequate safeguards against victimization of employees and directors who avail of the vigil mechanism and also provide for direct access to the chairperson of the Audit Committee or the director nominated to play the role of Audit Committee, as the case may be, in exceptional cases;
21) To approve the appointment of the chief financial officer of the Company (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;
22) To review the following information as prescribed under clause 49(III)(E) of the Listing Agreement:
(a) Management discussion and analysis of financial condition and results of operations;
(b) Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
(c) Management letter/ letters of internal control weaknesses issued by the statutory auditors;
(d) Internal audit reports relating to internal control weaknesses; and
(e) The Appointment, removal and terms of remuneration of the chief internal auditor.
23) All Related Party Transactions shall require prior approval of the Audit Committee. However, the Audit Committee may grant omnibus approval for Related Party Transactions proposed to be entered into by the company subject to the following conditions:
(a) The Audit Committee shall lay down the criteria for granting the omnibus approval in line with the policy on Related Party Transactions of the company and such approval shall be applicable in respect of transactions which are repetitive in nature.
(b) The Audit Committee shall satisfy itself the need for such omnibus approval and that such approval is in the interest of the Company;
(c) Such omnibus approval shall specify (i) the name/s of the related party, nature of transaction, period of transaction, maximum amount of transaction that can be entered into, (ii) the indicative base price/current contracted price and the formula for variation in the price if any and (iii) such other conditions as the Audit Committee may deem fit;
Provided that where the need for Related Party Transactions cannot be foreseen and aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions subject to their value not exceeding Rs.1 crore per transaction.
(d) Audit Committee shall review, atleast on a quarterly basis, the details of RPT's entered into by the Company pursuant to which the omnibus approval was given.
(e) Such omnibus approvals shall be valid for a period not exceeding one year and shall require fresh approval after the expiry of one year.
24) To review financial statements of, and investments made by, unlisted subsidiaries of the Company in accordance with clause 49(V)(B) of the Listing Agreement;
25) To formulate a policy for determining 'material subsidiaries' in accordance with clause 49(V)(D) of the Listing Agreement keeping in mind the following factors as provided under the Listing Agreement for further approval of the Board;
26) To recommend a proper system for storage, retrieval, display or printout of the electronic records, as the Audit Committee may deem appropriate;
27) To be present at the annual general meeting through the Chairman of the Audit Committee to answer the shareholder queries; and
28) To carry out any other function as may be specified by the Board from time to time.
The Terms and Powers of the Audit Committee are in compliance with the requirements of Companies Act, 2013 and Clause 49 of the Listing Agreement.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Board in compliance with the requirements with the Section 178 of the Companies Act, 2013 renamed the Shareholders & Investors Grievance Committee as "Stakeholders Relationship Committee."
The Shareholders & Investors Grievance committee inter-alia reviews quarterly reports of Registrar & Transfer Agent regarding various types of complaints/ requests received, resolved and pending, if any. It also reviews quarterly shareholding patterns etc.
NOMINATION AND REMUNERATION COMMITTEE:
The Board of Directors at its meeting held on August 12, 2014, revised the terms of reference of the Committee to meet the requirements of the Companies Act, 2013.
The revised and enhanced scope of the Committee is as follows:
1. To identify suitable candidates for directorship and senior management of the Company in accordance with the criteria laid down, recommend to the Board their appointment and removal, and undertake evaluation of every director's performance;
2. To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board, a policy relating to the remuneration for the directors, key managerial personnel and other employees of the Company. The said policy will be disclosed in the Board's report.
The Nomination and Remuneration Committee shall, while formulating the aforesaid policy, to ensure 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 executive directors, key managerial personnel and senior management of the Company 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.
3. To consider the following while approving the remuneration payable to a manager, managing director or a whole time director under Section II or Section III of Part II of Schedule V to the 2013 Act and section 197 of the 2013 Act:
(a) take into account, financial position of the Company, trend in the industry, appointee's qualification, experience, past performance, past remuneration, etc.;
(b) to bring about objectivity in determining the remuneration package while striking a balance between the interest of the Company and the shareholders.
4. To ensure that on appointment to the Board, independent directors receive a formal letter of appointment setting out clearly what is expected from them in terms of time-committee, committee service and involvement outside meetings of the Board;
5. To formulate the evaluation criteria for performance evaluation of independent directors and the Board;
6. To devise a policy on Board diversity;
7. To recommend to the Board, the plans for orderly succession for appointments to the Board and to senior management of the Company;
8. The Chairperson of the Nomination and Remuneration Committee or in his/her absence any other member of the committee duly authorized by him/her in this behalf to attend the general meetings of the Company and answer queries of shareholders (if any); and
9. To consider any other matters as may be requested by the Board.
Nomination, Remuneration and Evaluation Policy:
This Nomination, Remuneration and Evaluation Policy (the "Policy") applies to the Board of Directors (the "Board") and the Key Managerial Personnel (the "KMP") of Skyline Millars Limited (the "Company").
This Policy is in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Clause 49 under the Listing Agreement.
The primary objective of the Policy is to provide a framework and set standards for the nomination, remuneration and evaluation of the Directors and Key Managerial Personnel. The Company aims to achieve a balance of merit, experience and skills amongst its Directors and Key Managerial Personnel.
2.1) The Board is ultimately responsible for the appointment of Directors and Key Managerial Personnel.
2.2) The Board has delegated responsibility for assessing and selecting the candidates for the role of Directors and Key Managerial Personnel of the Company to the Nomination and Remuneration Committee which makes recommendations & nominations to the Board.
3) Appointment of Directors & KMPs
3.1) Enhancing the competencies of the Board and attracting as well as retaining talented employees for role of KMP are the basis for the Nomination and Remuneration Committee to select a candidate for appointment to the Board. When recommending a candidate for appointment, the Nomination and Remuneration Committee has regard to:
• assessing the appointee against a range of criteria which includes but not be limited to qualifications, skills, regional and industry experience, background and other qualities required to operate successfully in the position, with due regard for the benefits from diversifying the Board;
• the extent to which the appointee is likely to contribute to the overall effectiveness of the Board, work constructively with the existing directors and enhance the efficiencies of the Company;
• the skills and experience that the appointee brings to the role of KMP;
• the nature of existing positions held by the appointee including Directorships or other relationships and the impact they may have on the appointee's ability to exercise independent judgment;
3.2) Personal specifications:
• At least a Degree holder in one or more relevant disciplines;
• Experience of management in a diverse organization;
• Excellent interpersonal, communication and representational skills;
• Demonstrable leadership skills;
• Commitment to high standards of ethics, personal integrity and probity;
• Commitment to the promotion of equal opportunities, community cohesion and health and safety in the workplace;
• Having continuous professional development to refresh knowledge and skills.
3.3) Letters of Appointment
Each Director / KMP is required to sign the letter of appointment, as acceptance of the offer, with the Company containing the terms of appointment and the role assigned in the Company.
4) Remuneration of Directors and Key Managerial Personnel
The guiding principle is that the level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate Directors and Key Management Personnel.
The Directors and Key Management Personnel's salary shall be based & determined on the individual person's responsibilities and performance and in accordance with the limits as prescribed statutorily, if any.
The Nominations & Remuneration Committee determines individual remuneration packages for Directors and KMPs of the Company taking into account factors it deems relevant, including but not limited to market, business performance and practices in comparable companies, having due regard to financial and commercial health of the Company as well as prevailing laws and government/other guidelines. The Committee consults with the Chairman of the Board as it deems appropriate.
4.1) Remuneration of the Executive Director is recommended by the Committee to the Board of the Company.
Your Company is not paying any remuneration to its Directors except sitting fees for attending the Board and Committee Meetings.
The details of sitting fees paid to the Directors for attending the Board / Committee Meetings of the Company during the year and their shareholdings are as follows:
Risk Management Committee:
The Board in compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchange constituted a Risk Management Committee.
The Composition, Role, Terms of Reference as well as Powers of the Risk Management Committee of the Company meet the requirements of Clause 49 of the Listing Agreement.
The Risk Management Committee comprises of 4 members which includes 3 Directors and 1 members of Senior Management. Company Secretary is the Secretary of the Committee.
Risk Management Policy:
The Board of Directors has constituted a Risk Management Policy to comply with the requirements of the Clause 49 of the Listing Agreement. The Risk Management Policy is displayed on the Company's website and can be accessed in the link provided herein below: www.skylinemillarsltd.com
a. Related Party Transactions
The details of all transactions with related parties were placed before the Audit Committee and Board Meeting on quarterly basis. The Board has approved a policy for related party transactions which has been uploaded on the Company's website at the following link lhttp://www.skylinemillarsltd.com/Policy_on_Related_Party_Transactions.pdf
b. 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:
The Company has received Notice under Rule 4 of SEBI (Procedure for Holding Inquiry and imposing Penalties by Adjudicating officer) Rule 1995 reed with Section 15-I of the Securities and Exchange Board of India Act, 1992 dt. 16th September, 2013 for alleged violation of Regulation 8(2) of the SEBI (Substantial Acquisition of Shares and th Takeovers) Regulations, 1997. Further Company received an adjudication order from SEBI dt. 30 May, 2014 imposing a penalty of Rs.9,50,000/- (Rupees Nine Lacs Fifty Thousand only). Company filed an appeal at Securities Appellate Tribunal (SAT) Challenging in the order of SEBI. However as on date of signing of this report, the said matter is pending at Securities Appellate Tribunal (SAT).The Company also received a notice from BSE Limited th dt.29 January, 2015 imposing fine for late submission of Annual Report for the year 2014 as per clause 31 of the listing agreement. However the Company has paid penalty of Rs.1,124/- [Rupees One Thousand One Hundred Twenty Four Only] and the said default was made good.
c. The Company has adopted Whistle Blower Policy and it is fully implanted by Management. No personnel has been denied access to the Audit committee.
d. No personnel has been denied access to the Audit Committee. The said policy has been also put up on the website of the Company at the following link. http://www.skylinemillarsltd.com/Vigil_Mechinism_policy_of_SML.pdf
e. Compliances with mandatory and non-mandatory requirements of clause 49 of the Listing agreement. The Company has complied with mandatory and non-mandatory requirements of clause 49 of the listing agreement requiring it to obtain a certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in this clause and annex the certificate with the Directors Report., which is sent annually to all the shareholders of the Company. We have obtained a certificate to this effect from the auditors and the same is given as an annexure to the Directors Report.
f. Financial Controller certificate as per clause 49 of the Listing Agreement Financial Controller has duly submitted a certificate to the Board as required under Clause 49(V) of the Listing Agreement, which is appended herewith.
g. Management Discussion and Analysis
Management Discussion and Analysis Report forms part of this Annual Report and includes discussions on various matters specified under Clause 49 of the Listing Agreement.
MEANS OF COMMUNICATION:
a) Quarterly Results: The approved financial results are forthwith sent to stock exchanges where the shares are listed and are displayed on the Company's website: www.skylinemillarsltd.com and are generally published in the FreePress Journal and Navshakti newspapers.
b) Website: The Company's website www.skylinemillarsltd.com contains a separate dedicated section for Investors where Shareholders information is available. Quarterly Results, Annual Reports, Code of Conduct, Presentation to Investors, Shareholding Pattern, etc. are also available on the website.
GENERAL SHAREHOLDER INFORMATION:
1. Annual General Meeting:
95th Annual General Meeting of the Company will be held on Wednesday September 30 , 2015 at 2.30 p.m. at Babasaheb Dahanukar Sabha Griha , 6th Floor, Oricon House, 12 K. Dubhash Marg (RAMPART ROW) , Fort, Mumbai - 400 023 .
2. The Financial year of the Company is from April to March and schedule for the financial year 2015-16 is given below:
First quarter results (30th June) 2nd week of August, 2015
Mailing of Annual Reports 4th week of August, 2015
Annual General Meeting 30th September, 2015
Second quarter results (30th September) 2nd week of November, 2015
Third quarter results (31st December) 2nd week of February, 2016
Fourth quarter Results 2nd Week of May, 2016
3. Date of Book Closure:
24 September, 2015 to 30 September 2015.
4. Listing on Stock Exchange:
Bombay Stock Exchange Limited. (Code 505650) / Ahmedabad Stock Exchange Limited (Code 1310)
5. Dematerialization: ISIN Number INE178E01026
The shares of the Company are under demat trading. The Company has made necessary arrangements with CDSL and NSDL for demat facility and almost 90.15% of the Company's share capital is in demat form as on 31st March, 2015.
6. Registrar & Share Transfer Agent:
Link Intime India Private Limited acts as the Registrars and Share Transfer Agents of the Company. Share transfers, dividend payment, requests for duplicates, revalidation, transmission and other investor related requests are attended by M/s Link Intime India Private Limited at its Registered Office situated at:
Link Intime India Private Limited (Formerly IntimeSpecturm Registry Limited)
C-13, Pannalal Silk Mills Compound,L.B.S Marg, Bhandup (West). Mumbai - 400 078
Tel no: -91-22- 2594 69 70 Fax no: - 91-22-2594 69 69
Email: - firstname.lastname@example.org www.linkintime.co.in
7. Share Transfer System:
The entire share transfer requests lodged with the Registrar & Share Transfer Agent are processed within a maximum period of 15 days provided all the documents are submitted.
8. The Name & address of the Compliance Officer;
Mr. Ganesh R. Nalawade, Company Secretary & Compliance Officer * w.e.f. 08/06/2015
Skyline Millars Limited
Skyline Oasis Gate No.2, 412/413, Skyline Wealthspace, Premier Road, Vidyavihar (West), Mumbai-400086
Tel: 022-25162506 Email:email@example.com
12. Dematerialization: ISIN Number INE178E01026
As on March 31, 2015, 90.16% of the Company's total shares representing 3,62,65,410shares are held in dematerialized form and the balance 39,58,840 representing 9.84% shares are in Physical Form.
13. Company has not issued ESOP or any GDRs /ADRs /Warrants /Convertible Instrument.
14. DECLARATION UNDER CLAUSE 49 II (E) (2) OF THE LISTING AGREEMENT
As provided under Clause 49 II (E) of the Listing Agreement with Stock Exchange, I hereby affirm that all the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct for Board Members and Senior Management Personnel as applicable to them for the year ended March 31, 2015.
For Syline Millars Limited
Maulik H. Dave