Report On Corporate Governance
In accordance with the Clause 49 of the Listing Agreement, the report containing the details of the Governance systems and process at Sunteck Realty Limited is as under:
CORPORATE GOVERNANCE PHILOSOPHY
Corporate Governance is a set of principles, processes and system that is committed to values and conduct aimed at enhancing an organization's wealth generating capacity. The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. This is vital to gain and retain investor trust.
Corporate Governance norms and processes ensure effective engagement with the changing business environment and always seek to ensure that its performance goals are met with integrity. Your Company considers it inherent responsibility to disclose timely and accurate information regarding financials and performance of the Company.
The Board of Directors hereby present the Companies policies and practices on Corporate Governance as mandated under the clause 49 of the Listing Agreement.
BOARD OF DIRECTORS
Composition of the Board
The Company's policy is to maintain the optimum combination of Executive and Non Executive Directors to maintain the independence of the Board and separate its functions of governance and management. As at 31st March, 2015, the Board consists of Seven (7) Directors, out of which Four (4) are Non Executive Independent Directors.
The Board of Directors met four times during the Financial Year i.e. on 30th May 2014, 14th August 2014, 14th November 2014 and 12th February, 2015.
COMMITTEES OF THE BOARD OF DIRECTORS
(A) AUDIT COMMITTEE:
Constitution of Audit Committee and its functions:
The Audit Committee is constituted in line with the provisions of Revised Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013.
The purpose of the Audit Committee is to ensure the objectivity, credibility and correctness of the Company's financial reporting and disclosure processes, internal controls, risk management policies and processes, tax policies, compliance and legal requirements and associated matters.
During the financial year under review, four meetings of the Audit Committee were held i.e. on 30th May 2014, 14th August 2014, 14th November 2014 and 12th February, 2015.
Terms of Reference of Audit Committee:
The composition, powers, role and terms of reference of the Committee are in consonance with the requirements mandated under Section 177 of the Companies Act, 2013 and Revised Clause 49 of the Listing Agreement:
1. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
2. 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. 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 clause (c) of sub-section 3 of section 134 of the Companies Act, 2013
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 financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report
5. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
6. 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 utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
7. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the Company with related parties;
9. Scrutiny of Inter-Corporate Loans and Investments;
10. Valuation of undertakings or assets of the Company, wherever it is necessary;
11. Evaluation of Internal Financial Controls and Risk Management Systems;
12. Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the Internal Control Systems;
13. 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;
14. Discussion with Internal Auditors of any significant findings and follow up there on;
15. 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;
16. 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;
17. To review the functioning of the Whistle Blower Mechanism;
18. 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 & background, etc. of the candidate;
19. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee."
(B) STAKEHOLDERS RELATIONSHIP COMMITTEE
Constitution of Stakeholders Relationship Committee and its functions:
The Board of Directors of the Company has renamed the committee as Stakeholders Relationship Committee in accordance with the provisions of Section 178(5) of the Companies Act, 2013 and revised clause 49 of the Listing Agreement.
This Committee is specifically responsible for the redressal of security holders grievances related to non-receipt of Annual Report, non-receipt of declared dividend etc. The Committee also oversees the performance of the Registrar and Transfer Agents of the Company relating to investors services and recommend measures for improvement.
Terms of Reference of Stakeholders Relationship Committee:
The role of the Stakeholders Relationship Committee, inter alia, includes the following:
1. Investor relations and redressal of grievances of security holders in general and relating to non- receipt of dividends, interest, non receipt of Annual Report, etc., in particular.
2. Such other matters as may be required from time to time by any statutory, contractual or other regulatory requirements to be attended to by such a Committee.
The Committee met four times on i.e. on 30th May 2014, 14th August 2014, 14th November 2014 and 12th February, 2015.
During the financial year under review, the Company received one complaint from the shareholders and the same was redressed on time and at the close of the financial year there was no complaint remaining unattended.
Name, Designation and Address of the Compliance Officer:
Ms. Rachana Hingarajia Company Secretary Sunteck Realty Limited 5th Floor, Sunteck Centre, 37-40 Subhash Road, Vile Parle (East), Mumbai- 400057
(C) NOMINATION AND REMUNERATION COMMITTEE:
Constitution of Nomination and Remuneration Committee and its functions:
The Board of Directors has renamed existing Remuneration Committee as Nomination and Remuneration Committee and revised the terms of reference as per provisions of Section 178 of the Companies Act, 2013 read with revised Clause 49 of the Listing Agreement.
The Meeting of the Remuneration Committee was held on 14th August, 2014 during the year under review.
Terms of Reference of Nomination and Remuneration Committee:
The role of the Nomination and Remuneration Committee, inter alia, includes the followings:
1) 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;
2) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
3) Remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;
4) 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;
5) Formulation of criteria for evaluation of Independent Directors and the Board;
6) Devising a policy on Board diversity;
7) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.
Brief about Remuneration Policy:
Your Company has formulated a policy on Nomination and Remuneration of Directors and Senior Managerial Personnel and the major points relating to Remuneration policy are as follows:
A. Remuneration structure of Executive and Independent Directors:
i. Independent Directors receive remuneration by way of sitting fees for attending meetings of Board and Board Committees (where they are members) and commission as recommended by the Nomination, Remuneration, Compensation and Management Development Committee and approved by the Board and shareholders (wherever required) subject to ceiling/ limits as provided under the Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.
ii. The total commission payable to the Independent Directors shall not exceed 1% of the net profit of the Company.
iii. The remuneration/ compensation/ commission etc. to be paid to Managing Director/Whole-time Director/Executive Director etc. shall be as per their employment contract/ terms of appointment, subject to the limits and conditions under the Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force and the approval of the shareholders.
B. Remuneration structure of Key Managerial Personnel (KMP) and Senior Management is as detailed hereunder:
i. The compensation of KMP and Senior Management personnel shall be approved by the Nomination, Remuneration, Compensation and Management Development Committee.
ii. The Compensation of a KMP and Senior Management personnel is done keeping in consideration the prevailing market value of the resource, criticality of role and internal parity of the team.
iii. The remuneration structure to KMPs and Senior Management personnel may include a variable performance linked component.
Details of remuneration/commission and fees paid to Executive and Non-Executive Directors for the financial year 2014-2015:
• During the year, Mr. Kamal Khetan, Managing Director was paid remuneration amounting to Rs. 1,60,51,429 (Rupees One Crore Sixty Lakhs Fifty One Thousand Four Hundred Twenty Nine only), and Mr. Jignesh Sanghavi, Executive Director was paid a remuneration of Rs. 60,00,000 (Rupees Sixty Lakhs only). Non -Executive Directors were paid sitting fees for attending each meeting of the Board of Directors. The Company has paid Rs. 95,000/- as sitting fees to Directors during the Financial year 2014-2015.
During the year, the Company paid Rs. 3,06,000/- as professional fees to M/s. Kanga & Co., a firm in which the Company's Director, Shri Kishore Vussonji, is a partner. There were no other pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company. The Company has not granted any stock option to any of its Non-Executive Directors.
(D) CORPORATE GOVERNANCE COMMITTEE
Constitution of Corporate Governance Committee and its functions:
During the year, the Committee met 4 times on 9th April 2014, 7th July 2014, 10th October 2014 and 15th January 2015.
Terms of Reference of Corporate Governance Committee:
The role of the Corporate Governance Committee, inter alia, includes the following:
1. To observe practices of Corporate Governance at all levels and to suggest remedial measures wherever necessary.
2. To provide correct inputs to the media so as to preserve and protect the Company's image and standing.
3. To disseminate factually correct information to the investors, institutions and public at large.
4. To interact with the existing and prospective Flls and rating agencies, etc.
5. To recommend nomination of Directors on the Board.
(E) MANAGEMENT COMMITTEE
Role of Management Committee:
The role of the Management Committee, inter alia, includes the following:
1. Opening/Closure/Operations of various Bank Accounts like Client Accounts, Settlement Accounts, Own Fund Accounts, Fixed Deposit Accounts, PMS Schemes Accounts etc.
2. Availing 'Corporate Internet Facility' from various Banks/Depository Participants.
3. Opening/Closure/Operations of Demat accounts and Trading Accounts with various Depository Participants.
4. Execution and Registration of Leave & Licence, Purchase / Sale Agreements, Joint Venture Agreements and other similar agreements.
5. Change in Authorized Signatories for Bank Accounts, Demat Accounts, and Trading Accounts etc.
6. Application/surrender of new Telephone Lines/Lease Lines.
7. To borrow money otherwise than on Debentures from Banks and other Financial Institutions subject to the Limit of Rs. 500,00,00,000/- (Rupees Five Hundred Crore Only).
8. To invest the funds of the Company and to make loans including providing security/guarantee against any loan given to any organizations subject to the Limit of Rs. 500,00,00,000/- (Rupees Five Hundred Crore Only);
9. Application and Registration for Trade Marks, Patents, and Copyrights etc. and appoint attorneys and advisors for this purpose as also sign and execute powers of attorney /vakalatnama in favour of such attorneys/advisors.
10. To incorporate and authorize such officials of the Company for formation of subsidiaries / wholly owned subsidiaries / Joint ventures / Associate Companies / Branch offices In India or abroad;
11. To file/defend various litigation/Arbitration Matters in various Courts/Forums and appoint attorneys and legal advisors for this purpose as also sign and execute powers of attorney / vakalatnama in favour of such attorneys/advisors.
12. To authorize any person to attend AGM/EOGM of other Companies and give him appropriate instructions in relation to voting at such meetings.
13. To make application to Central/State and other statutory and Regulatory/Government authorities for various matters of the Company as may be required under the respective Regulation/Act as applicable to the Company.
14. To authorize representatives and signatories for Bidding of various Tenders.
15. To authorise for dealing with Stock Exchanges and signing various documents, deeds etc as may be required for Compliance of Listing agreement etc.
16. To appoint nominees on behalf of the Company in special Purpose Vehicle (SPVs) and Partnership Firms, Limited Liability Partnership (LLP) and other Business and non-Business entities.
17. To do all such matters, deeds and things and to sign all papers, agreements and documents as may be necessary in respect of the aforesaid matters.
(F) COMPENSATION COMMITTEE
Constitution of Compensation Committee and its functions:
During the year, there was no meeting held of Compensation Committee.
Role of Compensation Committee:
The role of the Compensation Committee, inter alia, includes the following:
1. To adopt rules and regulations for implementing the ESOS from time to time
2. To identify the employees eligible to participate under the Scheme
3. To grant Options / Shares to the identified eligible employees and determine the grant date under the ESOP
4. To determine the number of Options / Shares to be granted to each grantee and in aggregate under ESOP
5. To determine the number of Shares of the Company to be covered by each Option Granted
6. To determine the method of exercising the Vested Options, period of Exercise, etc.
7. To determine the Exercise price of the Options / Shares Granted
8. To determine the terms and conditions of any Options / Shares Granted hereunder
9. To determine the terms and conditions under which vested option can lapse in case of termination of employment for misconduct
10. To approve forms for agreements for use under the ESOS
11. To decide all other matters that must be determined in connection with an Option under the Scheme in accordance with SEBI Guidelines
12. To construe and interpret the terms of the Scheme and the Options Granted pursuant to the Scheme
13. To frame suitable policy, procedure and system to comply with the Securities and Exchange Board of India (Insider Trading) Regulations, 1992 and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995 to be followed by the Participant, and
14. To exercise such other powers as may be delegated by the Board from time to time.
(G) SPECIAL COMMITTEE (CAPITAL RAISING)
Constitution of Special Committee and its functions:
During the year, there was no meeting held of the Special Committee.
Role of Special Committee:
The role of the Special Committee, inter alia, includes the following:
1. To finalise the means of raising the additional capital
2. To decide the quantum of additional capital to be raised within the limits approved by the shareholders
3. To decide the terms and conditions for raising additional capital including the premium, if any
4. To make presentations to prospective investors
5. To decide and appoint bankers, merchant bankers, solicitors and other intermediaries as may be required
6. To approve and adopt Unaudited Balance sheet, Profit & Loss A/c for specific period as may be required
7. To correspond with the concerned authorities
8. To do any other acts as may be necessary for achieving the above mentioned purpose
(H) CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The Meeting of the CSR Committee was held on 31st March, 2015 during the year under review.
Role of CSR Committee:
The role of the CSR Committee, inter alia, includes the following:
1. To recommend to the Board CSR modalities of execution, implementation schedule, monitoring process and
amount to be incurred on such activities in a financial year;
2. To monitor the Corporate Social Responsibility the Policy from time to time.
3. To identify the projects to be undertaken by the Company for CSR
4. To ensure compliance of CSR Policy;
5. Any other matter as may be considered expedient in furtherance of and to comply with the CSR Policy of the
(I) INDEPENDENT DIRECTORS MEETING
During the year under review, the Independent Directors met on February 12, 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 Performance of the Chairman of the Company, taking into account the views of the Executive
and Non Executive Directors;
3. 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 their duties.
All the Independent Directors were present at the Meeting.
The Company does not have any material unlisted Indian subsidiary whose turnover or networth (paid-up and free reserves) exceeds 20% of the consolidated turnover or networth respectively, of the listed holding Company and its subsidiaries in the immediately preceding accounting year as defined under Clause 49 of the Listing Agreements.
The Company monitors the performance of its subsidiaries, interalia by following means:
- The Minutes of the Board Meetings of the Subsidiary Companies are noted at the Board Meetings of the Company.
- The Investments made by the Subsidiary Companies are reviewed by the audit Committee from time to time.
- Details of significant transactions and arrangements entered into by Subsidiary Companies are regularly placed at the Board Meetings of the Company.
(A) Basis of Related Party Transaction
During the period under review, the Company had not entered into any material transaction with any of its related parties. None of the transactions with any of related parties were in conflict with the Company's interest. All related party transactions are entered in the ordinary course of business. Transactions with related parties are disclosed in the Notes to the Accounts forming part of the Annual Report.
(B) Non Compliances/Strictures/Penalties Imposed
During the last three years, there were no penalties or strictures imposed on the Company by SEBI, Stock Exchange or any statutory authority on any matter related to capital market.
(C) Disclosure of Accounting Treatment
The Company has followed all relevant Accounting Standards while preparing the Financial Statements.
(D) 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. Employees may also report to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee.
(E) Non mandatory requirements
The Company has reviewed the non mandatory requirements under Clause 49 of the Listing Agreement and these shall be adopted/ complied by the Company on need based.
MEANS OF COMMUNICATION
a) Quarterly results: The Company's quarterly results are published in Free Press Journal and Navshakti and are displayed on its website (www.sunteckindia.com ).
b) News releases, presentations, among others: Official news releases and official media releases are sent to Stock Exchanges.
c) Presentations to institutional investors / analysts: Detailed presentations are made to institutional investors and financial analysts on the Company's unaudited quarterly as well as audited annual financial results. These presentations are also uploaded on the Company's website (www.suneckindia.com ).
The quarterly unaudited financial results and the Annual Audited Financial results are normally published in the widely circulating national and local newspapers viz. Free Press Journal and Navshakti.
GENERAL SHAREHOLDER INFORMATION
i. Annual General Meeting :
29th September, 2015
ii. Financial Year:
Accounting year :April to March
Financial reporting for the quarter ending June 30, 2015 :On or before 14th August, 2015
Financial reporting for the half year ending September 30, 2015 :On or before 14th November, 2015
Financial reporting for the quarter ending December 31, 2015: On or before 14th February, 2016
Financial reporting for the year ending March 31, 2016 :On or before 30th May, 2016
Annual General Meeting for the year ended March 31, 2015 :September, 2015
iii. Date of Book Closure:
25th September, 2015 to 29th September, 2015, both days inclusive.
iv. Dividend Payment Date:
The Board has recommended a dividend of 50% i.e. Rs. 1/- per Share. If declared by the Shareholders in the Annual General Meeting, the same will be paid within 30 days of declaration of Dividend.
v Listing on Stock Exchanges :
The Company's Equity Shares are listed on the BSE Limited and the National Stock Exchange of India Limited The Company confirms that it has paid annual listing fees due to the Stock exchanges for the year 2015-2016.
vi Stock Code:
Bombay Stock Exchange : 512179
National Stock Exchange : SUNTECK
ISIN Number for NSDL & CDSL : INE805D01026
vii Registrar & Share Transfer Agent:
Link Intime India Pvt. Ltd., C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup, Mumbai-400 078 Tel : (22) 25963838 Fax: (22) 25946969
viii. Share Transfer System: The share transfers which are received in physical form are processed by Registrar and Share Transfer Agent viz. Link Intime India Pvt. Ltd. and share certificates are dispatched within the time limit prescribed under the Listing Agreement.
ix Dematerialization of Shares
The Equity shares of the Company are held in Dematerialized form to the extent 98.60 % with National Securities Depository Limited and Central Depository Services (India) Limited.
x Address for Investors' Correspondence :
(1) Link Intime India Pvt Ltd.,
C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup, Mumbai-400 078 Tel : (22) 25963838 Fax: (22) 25946969
Sunteck Realty Limited 5th Floor Sunteck Centre 37-40, Subhash Road, Vile Parle (East) Mumbai- 400057 www.sunteckindia.com firstname.lastname@example.org
xi Code of Conduct:
The Board has formulated a code of conduct for the Board members and senior management of the Company and the same is reflected on the website of the Company.
xii ADRs and GDRs
There are no outstanding GDRs/ADRs/Warrants or any Convertible Instruments, as at the year end.
xiii Plant Location:
The Company does not have any plant.
xiv CEO/CFO Declaration:
Pursuant to clause 49I(D) of the Listing agreement entered into with the Stock Exchange, I hereby declare that all the Board members and Senior management personnel of the Company have affirmed compliances with the Code of Conduct for the Current Year.
For Sunteck Realty Limited
Chairman & Managing Director
Mumbai : 26th May, 2015