REPORT ON CORPORATE GOVERNANCE FOR THE FINANCIAL YEAR 2014-1015
1. COMPANY'S PHILOSOPHY ON THE CODE OF GOVERNANCE
The Company believes that Corporate Governance is a set of processes, customs, policies, rules, regulation and laws for ensuring transparency, professionalism and accountability in its dealings with its customers, principal, employees, shareholders and with every individual who comes in contact with the Company. The Company's philosophy on Corporate Governance is bounded upon a rich legacy of fair ethical governance practices which has been in practice since the beginning. In fact the company has long been a staunch supporter of this code even before it became mandatory. Integrity, transparency, accountability and compliance with laws which are columns of good governance have always been the hallmark of company. The Company is in full compliance with the requirements of Corporate Governance under Clause 49 of the Listing Agreement entered into with the Stock Exchanges.
2. BOARD COMPOSITION Board of Directors
The Company has 12 Directors of which 2 are an Executive Directors and 4 are Non-Executive and 6 are Independent Directors including a woman director who was appointed as additional director in the category of independent director. The composition of the Board is in conformity with clause 49 of the listing Agreement entered into with the stock Exchanges.
None of the directors on the board hold directorships in more than ten public companies. Further, none of them is a member of more than ten committees or chairman of more than five committees across all the public companies in which he is a director. Necessary disclosures regarding committee positions in other public companies as on March 31, 2015 have been made by the directors.
Independent directors are non-executive directors as defined under Clause 49(II)(B)(1) of the Listing Agreements entered into with the Stock Exchanges. The maximum tenure of the independent directors is in compliance with the Companies Act, 2013 ("Act"). All the Independent Directors have confirmed that they meet the criteria as mentioned under clause 49 of the Listing Agreement and Section 149 of the Act.
Four Board Meetings were held during the year ended on 31 March 2015. These were held on May 27, 2014; August 6, 2014; November 10, 2014 and January 31, 2015. Maximum time gap between two Board Meetings did not exceed the limits as prescribed in Clause 49 of the Listing Agreement.
3. Independent Directors :
The Independent Directors have complied with the definition of Independence as per Clause 49 of the Listing Agreement and according to the Provisions of section 149(6) Companies Act, 2013. The company has also obtained declarations from all the Independent Directors pursuant to section 149 (7) of the Companies Act, 2013.
Training of Independent Directors :
Whenever new Non-executive and Independent Directors are inducted in the Board they are introduced to our Company's culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, board procedures, our major risks and management strategy.
The appointment letters of Independent Directors has been provided to the directors appointed and also placed on the Company's website at www.tapariatools.com
Performance Evaluation of non-executive and Independent Directors
The Board evaluates the performance of Non-executive and Independent Directors every year. All the Nonexecutive and Independent Directors are eminent personalities having wide experience in the field of business, industry and administration. Their presence on the Board is advantageous and fruitful in taking business decisions.
4. AUDIT COMMITTEE Composition of the Committee
The Audit Committee of the Company comprises of five Independent Directors, namely,
a) Shri G. S. Manasawala - Chairman b) Shri P. N. Shah c) Shri B. B. Ladda d) Shri Rajeev J. Mundra and e) Shri Shyam Malpani.
The members of the Committee have good exposure to Law, Financial Management, Taxation, Company Law matters, Internal/External Audit as well as in the areas of general management.
The Committee's composition meets with requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Members of the Audit Committee possess financial / accounting expertise / exposure.
Scope of Audit Committee
The scope and function of the Audit Committee is in accordance with Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, as amended from time to time, and its terms of reference include the following:
1. Overseeing the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
2. Recommending to the Board, the appointment, and if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
3. Approving payments to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing with the management, the quarterly and annual financial statements before submission to the Board for approval, with particular reference to:
a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms 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 to financial statements arising out of audit findings;
e) Compliance with listing and other legal requirements relating to financial statements;
f) Approval or any subsequent modification of transactions of the Company with related parties;
g) Scrutiny of inter-corporate loans and investments.
h) Qualifications in the draft audit report.
5. Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document / prospectus/ notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue and making appropriate recommendations to the Board to take up steps in this matter.
6. Review and monitor auditors independence and performance of statutory and internal auditors and effectiveness of adequacy of audit process.
7. Reviewing the adequacy of internal audit function, 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.
8. Carrying discussions with internal auditors on any significant findings and follow up there on.
9. 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.
10. Carrying 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.
11. To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case of non- payment of declared dividends) and creditors.
12. To monitor the use of proceeds received in the initial public offering.
13. Approval of appointment of CFO (i.e. the Whole-time Financial Director or any other person heading the finance function or discharging that function) after assessing the qualification and background etc. of the candidate.
14. To review the functioning of the Whistle Blower mechanism.
Powers of Audit Committee:
1. To investigate any activity within its terms of reference
2. To seek information from any employee
3. Major accounting entries involving estimates based on the exercise of judgment by the management;
4. Significant adjustments made in financial statements arising out of audit findings;
5. Compliance with listing and other legal requirements relating to financial statements;
6. Approval or any subsequent modification of transactions of the Company with related parties;
7. Scrutiny of inter-corporate loans and investments.
Four Meetings were held during the year - on May 27, 2014; August 6, 2014; November 10, 2014 and January 31, 2015.
Terms of Reference of the Committee, inter alia, includes the following:
1. To identify 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.
2. To devise a policy on Board diversity;
3. To formulate the criteria for evaluation of Independent Directors and the Board;
4. 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.
Nomination and Remuneration Committee Meeting was held in the year under review on August 6, 2014, November 10,2014 and January 31, 2015.
The Nomination and Remuneration Committee is fully empowered to determine/approve and revise, subject to necessary approvals, the remuneration of managerial personnel including Managing Director after taking into account the financial position of the Company, trends in the industry, qualifications, experience, past performance and past remuneration, etc.
The Non-Executive Directors are paid sitting fees for every meeting of the Board and its Committees attended by them.
6. STAKEHOLDERS' RELATIONSHIP COMMITTEE
Composition of the Committee
The members of the Shareholders Grievances/Share Allotment and Transfer Committee of the Company are Shri D. P. Taparia, Chairman, Shri H. N. Taparia and Shri Sivaramakrishnan.
Shri V. S. Datey, Company Secretary who is the Compliance Officer can be contacted at the registered office of the Company.
Terms of reference:
The Stakeholders' Relationship Committee, inter alia, is primarily responsible for considering and resolving grievances of security holders of the Company. The additional powers (terms of reference) of the Stakeholders' Relationship Committee are:
1. Review and oversee the process of transfer, transmission of shares, issue duplicate share certificates, splitting or consolidation of share certificates, redress shareholders' complaints, approve the nominations received, dematerialisation, rematerialisation, etc. and other shares related formalities.
2. Review and oversee the process of resolving of shareholders /investors/ security-holders grievances.
3. Advise the Board of Directors on matters which can facilitate better investor services and relations.
4. Carry out any other function as is referred by the Board from time to time or enforced by any statutory notification / amendment or modification as may be applicable.
No. of Meetings held during the year:
During the year the Committee had 12 meetings on 18th April 2014, 6th May 2014, 17th May 2014, 18th June 2014, 28th June 2014, 5th July 2014, 12th July 2014, 19th July 2014, 2nd August 2014, 6th August 2014, 9th August 2014, and 4th November 2014.
7. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR) Composition of the Committee
The members of the Corporate Social Responsibility Committee of the Company are Shri H. N. Taparia (Chairman), Shri D. P. Taparia and Shri. B. B. Ladda.
Terms of reference:
The Committee formulates and recommend to the Board, a CSR Policy and recommend the amount of expenditure to be incurred on CSR activities. Committee framed a transparent monitoring mechanism for implementation of CSR projects or programs or activities undertaken by the Company and also CSR policy from time to time.
The CSR Committee of the Company consists of Chairman, 1 Non-Executive Director and 1 Independent Director.
No. of Meetings held during the year
During the year the Committee had 2 meetings on 27th May 2014 and 8th August 2014.
8. RISK MANAGEMENT COMMITTEE:
During the financial year ended 31st March, 2015, the Board of Directors constituted a Risk Management Committee and also defined its roles and responsibilities in accordance with the provisions of Clause 49 of the Listing Agreement.
Terms of reference:
The Committee's terms of reference, inter alia, include framing risk management policy and identifying Company's risk appetite set for various elements of risk, review the risk management practices & structures and recommend changes to ensure their adequacy, approve & review the risk treatment plans put in place by management and ensure adequacy of risk management practices in the Company.
It prescribes the roles and responsibilities of various stakeholders within the Company, the structure for managing risks and the framework for risk management.
This policy and the Internal Financial Controls comprehensively address the key strategic/business risks and operational risks respectively.
Related Party Transactions
The details of the related party transactions during the year under review are shown in the Notes to Accounts which form part of this Report.
Disclosure of Accounting Treatment
The Company has followed the treatment laid down in the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in the preparation of financial statements. There are no audit qualifications in the Company's financial statements for the year under review.
Vigil Mechanism / Whistle-blower Policy
In line with the best Corporate Governance practices, Taparia Tools Limited, has put in place a system through which the Directors, employees and business associates may report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct & Ethics without fear of reprisal. The Company has put in place a process by which employees and business associates have direct access to the Audit Committee Chairman, Managing Director, Chairman of the Board and Compliance Officer.
The Whistle-blower Policy is placed on the notice board of the Company, and its website. Moreover, it is also carried in this Annual Report.
Compliances by the Companies
The Company has complied with various rules and regulations prescribed by Stock Exchange, SEBI or any other statutory authority relating to the capital markets during the last three years. No penalties or strictures have been imposed by them on the Company.
Details of adoption of non-mandatory requirements under Clause 49 of the Listing Agreement by the Company
A) The Financial Results of the Company are published in the newspapers on quarterly basis. Hence, they are not sent to each shareholder.
B) The statutory financial statements of the Company are unqualified.
C) The Board of Directors of the Company consists of an optimal blend of Company Executives and Independent professionals having knowledge of Business and expertise in their area of specialization.
13. MEANS OF COMMUNICATION
The quarterly, half-yearly and yearly financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board. These are also published in the newspapers.
14. SEBI Complaints Redressal System (SCORES):
SEBI has initiated SCORES for processing the investor complaints in a centralized web based redress system and online redressal of all the shareholders complaints. The company is in compliance with the SCORES and redressed the shareholders complaints well within the stipulated time.
15. GENERAL SHAREHOLDERS INFORMATION
a) Annual General Meeting
Day, Date & Time : Tuesday day, 29th September, 2015 at 9.30 a.m.
Venue : Hotel Bon Vivant, Patil Park, Old Gangapur Naka, Opp. Dongre Vasti Gruh, Nashik - 422 002
b) Financial Calendar
Year Ending : 31st March 2016
Quarterly Results : To be declared within 45 days from the relevant quarter.
Meeting for consideration of quarterly unaudited results : Within 45 days from end of quarter as per the Listing Agreement with the BSE.
Audited results for the year ending on 31st March 2016 : May 2016
Annual General Meeting for the year 2016 : September 2016
c) Date of Book Closure
From 23rd September, 2015 (Wednesday) to 29th September, 2015 (Tuesday), inclusive of both days.
d) Dividend Payment Date
No Dividend for Financial Year 2014-15 is proposed
f) Market Price Data
High and Low quotations of shares during the financial year 2014-15 are Rs. 100/- and Rs. 60/- per share respectively.
g) Registrar and Share Transfer Agents / Dematerialisation of shares
Shareholders may contact the Company's Registrar and Share Transfer Agent (for both physical and demat segments) at the following address for any assistance regarding dematerialization of shares, share transfers, transmission, change of address, and any other query relating to the shares of the Company:
Universal Capital Securities Pvt. Ltd
21, Shakil Niwas, Opp. Satya Sai Baba Temple, Mahakali Caves Road, Andheri (East) Mumbai - 400 093 Maharashtra Tel: (022) 2820 7203-05 Fax: (022) 2820 7207 Email: firstname.lastname@example.org Web Site: www.unisec.in
h) Share Transfer System
Taparia Tools Limited has completed all the formalities with CDSL and NSDL in regards to Dematerialisation of shares. Now the shareholders of the company can avail the facility of demating their shares with both the depositories i.e. NSDL and CDSL.
Shareholders may send their shares for transfer in physical form to RTA or at Registered Office of the Company. RTA will register such transfers within 15 days of receipt of the documents, if documents are found in order.
k) Dematerialisation and Liquidity:
Taparia Tools Limited has completed all the formalities with CDSL and NSDL in regards to Dematerialisation of shares.
l) Plant Locations
• Nasik : 52 & 52B, MIDC Area, Trimbak Road, Satpur, Nashik - 422 007 (Maharashtra)
• Goa : Plot No. L-29, Cuncolim Industrial Estate, Cuncolim - 403 703 (Goa)
m) Registered Office and Address for correspondence
52 & 52B, MIDC Area, Trimbak Road, Satpur, Nashik - 422 007 (Maharashtra)
16. Unclaimed Dividend Amounts:
Pursuant to the provisions of Section 123 of the Companies Act, 2013, the dividend for the following years, which remain unclaimed for seven years, will be transferred to Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 125 of the Companies Act, 2013.
Members are also advised to update their correspondence address in their demat accounts in case of their holdings in electronic form or inform their latest correspondence address to the Registrars in case of holdings in physical form.
17. CODE OF CONDUCT
The members of the Board of Directors of TAPARIA TOOLS LTD acknowledge and accept the scope and extent of their duties as Directors.
The Code of Conduct as adopted by the Board of Directors is applicable to all Board Members, Senior Management and Head of Departments of the Company. They are entrusted with and are responsible for the oversight of the assets and business affairs of TAPARIA TOOLS LTD. in an honest, fair, diligent and ethical manner. They must act within the bounds of the authority conferred upon them and with the duty to make and enact informed decisions and policies in the best interests of the Company.
A declaration by the Chairman and Managing Director of the Company affirming the compliance of the Code by the Board Members and Senior Management is given at the end of the report.
For and on behalf of the Board,
Chairman & Managing Director
Place : Mumbai,
Date : 8th August 2015