CORPORATE GOVERNANCE REPORT
COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE
Unitech is committed to conduct its business based on the highest standards of corporate governance. The Company promotes a culture that is based on the principles of good corporate governance – integrity, equity, fairness, individual accountability and commitment to values.
The Company emphasizes the need for highest level of transparency and accountability in all its transactions in order to protect the interests of all its stakeholders. The Board considers itself as a trustee of its shareholders and acknowledges its responsibilities towards them for creation and safeguarding their wealth on sustainable basis.
The Management promotes honest and ethical conduct of the business along with complying with applicable laws, rules and regulations. It abides by the policies and procedures – both legal as well as social - so as to ensure its commitment to compliance and create and maintain a culture of high ethical standards and maintain a work environment that encourages not only the staff but the stakeholders too to raise their faith in the management of the Company.
BOAR D OF DIRECTORS
Composition of the Board
The Board of Directors of the Company has an optimum combination of Executive and Non-Executive Directors. The structure of the Board of Directors comprises of eight Directors – three Executive Directors and five Non-Executive Directors, and is chaired by an Executive Chairman. Out of the five Non-Executive Directors four are Independent Directors.
During the year Dr. P.K. Mohanty resigned as a Director w.e.f. 13th August, 2014. The Board appreciates the long association of Dr. Mohanty with the Company and his valuable services rendered to the Company during his tenure as a Director.
All Independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board.
Policy on Board Diversity
During the year under review, upon recommendation of Nomination & Remuneration Committee, the Board has approved and implemented the Policy on Board Diversity. The Board has optimum combination of Directors from different areas and fields like Legal, Management, Finance, Real Estate & Construction, Education, Hospitality etc.
During the financial year ended 31st March, 2015, four (4) meetings of the Board of Directors were held i.e. on 28th May 2014, 13th August, 2014, 12th November 2014, and 13th February 2015.
The intervening period between the two Board Meetings was within the maximum time gap prescribed under the Companies Act and Listing Agreement.
Information supplied to the Board
During the year, all the relevant informations required to be placed before the Board of Directors as per Listing Agreement were considered and taken on record / approved by the Board. Further, the Board periodically reviews the Compliances of various laws and regulations applicable to the Company.
Criteria of making payments to Non-Executive Directors
Non-Executive Directors of the Company are entitled to sitting fee for the meetings of the Board of Directors attended by them.
Further, the Independent Directors of the Company are also entitled to payment of an annual Commission of a sum not exceeding 1% p.a. of the net profit of the Company subject to maximum of Rs. 100 lacs p.a. to be divided equally amongst the said Directors.
The members had accorded their approval for the payment of commission by way of Special Resolution passed at the 42nd Annual General Meeting for a period of five years which expires on 31st March 2018. However the Board has decided not to pay Commission to Independent Directors for the financial year 2014-15 due to inadequate profits.
Code of Conduct for the Directors and senior management personnel
The Company has laid down a Code of Conduct (“Code”) for all the Board members and senior management personnel of the Company. The Code is also posted on the website of the Company. All Board members and senior management personnel have affirmed their compliance with the Code for the financial year ended 31st March, 2015. A declaration to this effect signed by Mr. Ajay Chandra & Mr. Sanjay Chandra, Managing Directors of the Company, forms part of this Report as Annexure A.
Whistle Blower Policy/Vigil Mechanism
The Company has established a Vigil Mechanism/Whistle Blower Policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct or ethics policy.
The Policy on Vigil Mechanism provide for adequate safeguards against victimization of Director(s)/employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The Vigil Mechanism/Whistle Blower Policy has been posted on Company’s website (www.unitechgroup.com).
Director(s) Retiring by Rotation – Re-appointment
In terms of the provisions of the Companies Act, 2013, Mr. Sanjay Chandra retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for reappointment.
Tenure of Independent Directors
The Independent Directors have been appointed for five consecutive years from the date of their respective appointment.
Familiarization Programme for Independent Directors
The Company conducts Familiarization Programme for Independent Directors to provide them an opportunity to familiarize with the Company, its management and its operations so as to gain a clear understanding of their rules & responsibilities towards the company.
The details of familiarization programmes are available on Company’s website under weblink http://www.unitechgroup. com/investor-relations/corporate-governance.asp .
COMMITTEES OF THE BOARD
During the year under review, the Company had six Board level Committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Committee of Directors, Corporate Social Responsibility Committee & Risk Management Committee.
Details of the role and composition of each of the Board Committees alongwith the number of meetings held during the financial year and attendance of Directors/Members thereat are provided hereinafter.
The Company has a duly constituted Audit Committee, the scope of which is quite comprehensive and is in conformity with the revised Clause 49 of the Listing Agreement and the Companies Act, 2013. In brief, the Audit Committee is entrusted with the overall supervision of the financial reporting and review of the quarterly and annual financial statements before submitting to the Board for their approval thereon; recommending the appointment and removal of Statutory Auditors & Cost Auditors to the Board and fixation of their audit fees and approval of payment of fees for any other services; reviewing the performance of Statutory Auditors, Cost Auditors and Internal Auditors; discussions with the Statutory Auditors on the scope of audit and areas of concern, if any; discussions with the internal auditors on the adequacy and effectiveness of their function and the internal control systems of the Company and any significant findings and follow ups thereon; and reviewing any other matter which may be specified as part of the role of Audit Committee. The minutes of the meetings of the Audit Committee are placed before the Board.
Brief terms of reference of Audit Committee are as follows :
• Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval
• 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
•Compliance with listing and other legal requirements relating to financial statements
•Disclosure of any related party transactions
•Qualifications in the draft audit report
•Review and monitor the auditor’s independence and performance, and effectiveness of audit process
•Evaluation of internal financial controls and risk management systems
During the year under review, the Audit Committee met four (4) times i.e. on 28th May, 2014, 13th August, 2014, 12th November, 2014 and 13th February, 2015. The intervening period between the two Audit Committee meetings was within the maximum time gap prescribed under Listing Agreement.
All the members of the Committee are financially literate and Mr. Ajay Chandra (MBA-Finance) & Mr. Sunil Rekhi, Chartered Accountant are having financial management expertise.
The Chief Financial Officer, representatives of the Statutory Auditors and the Internal Auditors, being permanent invitees to the Meetings of the Audit Committee, attended the meetings of the Committee held during the year. The Company Secretary acts as the Secretary to the Committee.
The Chairman of Audit Committee, Mr. G. R. Ambwani, was present at the Annual General Meeting held on 26th September 2014.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee has been constituted by the Board to determine and review from time to time the appointment and remuneration of the Directors of the company and make recommendations of the same to the Board. Such recommendations are made considering the overall performance and annual financial results of the Company.
During the year 2014-15, two meetings of the Committee were held on 28h May 2014 & 12th November 2014. Mr. G. R. Ambwani chaired both the meetings held during the year. The Company Secretary acts as the Secretary to the Committee.
The remuneration of Executive /Non-Executive Directors is based on the qualification of appointee(s), their experience, their past performance, track record, their potentials, responsibility shouldered, external competitive environment and performance of the Company. The Board / Committee regularly keeps track of the market trends in terms of compensation levels and practices in relevant industries through participation in structured surveys.
The Policy on remuneration of Directors, Key Managerial Personnel [KMPs] & other senior employees is available on Company’s website under weblink: http://www.unitechgroup.com/investor-relations/corporate-governance.asp.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee (earlier known as Shareholders’/Investors’ Grievance Committee) has been constituted to look into the redressal of Shareholders’ and other investors’ complaints and related issues.
During the year under review, the Stakeholders Relationship Committee met once on 28th May 2014.
The Investors’ queries/complaints received and resolved during the year under review are as follows: Opening Bal.: Nil; Received & Resolved during the financial year: 29; Closing Bal.: Nil.
Mr. Deepak Jain, Vice President & Company Secretary is the Compliance Officer of the Company and also acts as the Secretary to the Committee.
COMMITTEE OF DIRECTORS
A Committee of Directors has been constituted by the Board to decide matters pertaining to day to day business operations including opening of accounts with various banks and changing the signatories as and when required; borrowing funds; to give necessary authorizations for various business requirements; and to do all incidental acts, deeds and things.
During the year under review, the Committee met seventeen (17) times i.e. on 16th April 2014, 8th May 2014, 14th May, 2015, 25th June 2014, 18th July 2014, 14th August 2014, 2nd September 2014, 29th September 2014, 14th October 2014, 10th November 2014, 26th November 2014, 12th December 2014, 3rd January 2015, 10th January 2015, 24th January 2015, 16th February 2015 and 20th March 2015. Mr. Ramesh Chandra chaired all the meetings of the Committee held during the year. The Company Secretary acts as the Secretary to the Committee.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
During the year under review, in terms of Section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has Constituted a Board Committee viz. “Corporate Social Responsibility (CSR) Committee”.
Brief terms of reference of CSR Committee includes :
• framing of CSR Policy, review & monitor it periodically and execution of activities mentioned under Schedule VII to the Companies Act, 2013 and as per CSR Policy of the Company.
• recommend the amount of expenditure to be incurred on the above mentioned activities;
• institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company; and
During the year under review, the Corporate Social Responsibility Committee met twice on 28th May, 2014 and 12th November, 2014. Both the meetings were chaired by Mr. Sanjay Chandra.
The Company Secretary acts as the Secretary to the Committee.
RISK MANAGEMENT COMMITTEE
During the year under review, in terms of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee.
The Board ensured the framing & implementing the risk management plan of the Company by adopting and implementing Risk Management Policy with following objectives :
• To establish a framework for the Company’s Risk Management process and to ensure its implementation.
•To ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e to ensure adequate systems for risk management.
•To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices
During the year under review, the Risk Management Committee met once on 13th February, 2015. The meeting was chaired by Mr. Sanjay Chandra.
The Company Secretary acts as the Secretary to the Committee.
MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met on 13th February, 2015 without the presence of Non-Independent Directors and members of the Management. At this meeting, the Independent Directors inter alia evaluated the performance of the Non-Independent Directors and the Board of Directors as a whole, evaluated the performance of the Chairman of the Board and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board. All Independent Directors except Mr. Ravinder Singhania were present in the Meeting.
During the year under review, the company does not have any material non-listed Indian subsidiary company as defined under Listing Agreement. During the year under review the company has formulated a Policy for determining material subsidiaries and the same is available at the Company’s website under web link: http://www.unitechgroup.com/investor-relations/corporate-governance.asp
Management Discussion and Analysis Report
The Report on Management Discussion and Analysis is given separately and forms part of the Board Report.
Related Party Transactions
All related party transactions attracting compliance under clause 49 of the Listing Agreement or Companies Act, 2013 are placed before the Audit Committee and the Board. Prior omnibus approval of the Audit Committee was also obtained for the transactions which were of a foreseen and repetitive nature.
All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm’s length basis. During the year under review, the Company has not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the company on materiality of related party transactions.
The Company has framed, approved and implemented a Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions and the same is available on Company’s website under web link: http://www.unitechgroup.com/investor-relations/corporate-governance.asp
Disclosure of Accounting Treatment
In the preparation of the financial statements, the Company has followed the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) to the extent applicable.
Disclosure made by the Senior Management Personnel to the Board
During the year, no material transaction has been entered into by the Company with the senior management personnel where they had or were deemed to have had personal interest that may have a potential conflict with the interest of the Company.
In terms of the Listing Agreement, the Certificate duly signed by Mr. Ajay Chandra, Mr. Sanjay Chandra, Managing Directors and Mr. Sunil Keswani, Chief Financial Officer of the Company was placed before the Board of Directors along with the financial statements. The certificate for the year ended 31st March, 2015 forms a part of this report as Annexure B.
Compliances by the Company
The Board of Directors periodically reviews the compliances of various laws applicable to the Company, and the Company initiates requisite action for strengthening of its statutory compliance procedures.
The Company has complied with various applicable rules and regulations prescribed by the Stock Exchanges, Securities and Exchange Board of India (SEBI) and other statutory authorities on all matters relating to capital markets, and no penalties or strictures have been imposed on the Company by any of them in this regard during the last three years.
Means of Communication
a. Financial Results: Quarterly/Annual Results are published in the leading newspapers viz. ‘Financial Express / Mint’ (English) and ‘Rashtriya Sahara / Jansatta’ (Hindi) and are also posted on the Company’s website www.unitechgroup.com.
b. Website: The Company’s website contains a separate dedicated section ‘Investor Relations’. It contains comprehensive database of information of interest to our investors including the financial results and Annual Report of the Company, Shareholding Pattern, Insider trading policy, Corporate Governance Compliances and Unpaid / Unclaimed amount. The basic information about the Company as called for in terms of the Listing Agreement with the Stock Exchanges is provided on Company’s website and the same is updated regularly.
c. Annual Report: Annual Report containing inter alia, Audited Annual Accounts, Consolidated Financial Statements, Board Report, Statutory Auditors’ Report and other important information is circulated to members and others entitled thereto. The Company shall be emailing to the Members at their available e-mail IDs, the soft copy of the Annual Report for the year ended 31st March, 2015. However the members whose email IDs are not available, the company shall be sending the physical copy of the abridged version of the Annual Report.
d. Designated email-id: The Company has a designated email-id firstname.lastname@example.org, exclusively for investor service.
General Body Meetings
The details of the Annual General Meetings held during the last three years are given in Table 10.
Special Resolutions passed through Postal Ballot last year
During the year under review, the Company has not passed any Resolution through Postal Ballot.
Whether any Special Resolution is proposed to be passed through Postal Ballot
None of the business proposed to be transacted in the ensuing annual general meeting require passing of special resolution through postal ballot.
Annual General Meeting:
The 44th Annual General Meeting of the Company is scheduled to be held on Monday, 28th September, 2015 at 11.00 A.M. at Tivoli Garden Resorts Hotel, Chhattarpur Hills, Chattarpur, New Delhi - 110074
Financial year of the Company
The financial year of the Company is from 1st April to 31st March every year.
Financial Calendar 2015-16 (tentative and subject to change)
For the financial year 2015-16, the financial results would be announced as per the following schedule:
For the first quarter ending 30th June 2015 : Second week of August, 2015
For the second quarter and half year ending 30th September 2015 : Second week of November, 2015
For the third quarter and nine months ending 31st December 2015 : Second week of February, 2016
For the fourth quarter & year ending 31st March 2016 : Last week of May, 2016
Book Closure Period
The register of Members and Share Transfer Books of the Company will remain closed from Tuesday, 22nd September 2015 to Monday, 28th September, 2015 (both days inclusive) for the purpose of Annual General Meeting of the Company
No Dividend is recommended by the Board of Directors of the Company for the financial year 2014-15.
Stock Exchange listing
The Company’s equity shares are listed at the following stock exchanges and are actively traded:-
i) BSE Ltd.,
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001
ii) National Stock Exchange of India Ltd. (NSE),
“Exchange Plaza,” Plot No. C-1, G. Block, Bandra Kurla Complex, Bandra (East), Mumbai –400 051
Payment of Listing Fees
Annual Listing Fees for the financial year 2015-16 has been paid to the above Stock Exchanges.
Stock Market Data
The monthly high and low prices as well as the volume of shares traded at BSE and NSE, for the year 2014-15 is given in Table 11.
The Chart A plots the movement of the Company’s share price on BSE versus BSE Sensex for the year 2014-15:
The Chart B, plots the movement of the Company’s share price on NSE versus S & P CNX Nifty for the year 2014-15:
Registrar and Share Transfer Agent
Alankit Assignments Limited
RTA Division: Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi - 110055
Tel.: +91-11-42541234 Fax: +91-11-41543474 E-mail: email@example.com
Share Transfer System
Alankit Assignments Ltd. (RTA) processes the share transfer/ transmission requests on weekly basis (usually on every Friday) and the said transfer/transmission of shares in physical form are approved by the Company Secretary, as per authority delegated to him by the Board of Directors to, inter alia, approve the share transfers and transmissions.
Further in order to expedite the Share Transfer process, an officer of the Company is also authorized to approve transfer of shares upto a limit of 15000 shares per folio per calendar month.
Distribution of Shareholding
The distribution of shareholding of the equity shares of the Company and the shareholding pattern as on 31st March, 2015 are given in Table 12 and 13 respectively.
Dematerialization of Shares
The equity shares of the Company were made available for dematerialization under the depository system operated by the Central Depository Services (India) Ltd. (CDSL), with effect from 1st April, 2000, and National Securities Depository Ltd. (NSDL) with effect from 3rd April, 2000. With effect from 28th August, 2000, the shares of the Company are under the compulsory demat settlement mode and can be traded only in the demat form. About 99.36% of total shares of the Company have been dematerialized.
International Securities Identification Number (ISIN) allotted to the Company by NSDL and CDSL is ‘INE694A01020’.
The Company’s shares are liquid and actively traded on BSE and NSE. The monthly trading volumes of the Company’s shares on these exchanges are given in Table 11 of this Report.
Outstanding GDRs/ ADRs/ Warrants or any Convertible Instruments, conversion date and likely impact on equity
During the year under review, there were no outstanding GDRs/ADRs/ Warrants or any Convertible Instruments; therefore there are no such conversion dates and likely impact on equity.
Address for correspondence by Investors:
(i) For transfer/transmission of shares held in physical form, duplicate share certificates, change of address and any other query relating to the shares, except relating to dividends which should be addressed to the Company, investors may communicate with the Registrar & Share Transfer Agent at the following address:-
Alankit Assignments Ltd.
RTA Division : Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi 110055.
Tel.: +91-11-42541234. Fax: +91-11-41543474
Contact Person: Mr. Harish Aggarwal
For Members holding shares in demat form, all other correspondences should be addressed to their respective depository participants.
(ii) Mr. Deepak Jain, Vice-President & Company Secretary
is the Compliance Officer and investors may lodge complaints, if any, at the following address :
Basement, 6, Community Centre, Saket, New Delhi - 110017
Tel.: +91-124-4125200. Fax: +91-124-2383332 Email: firstname.lastname@example.org
Members are allowed to nominate any person to whom they desire to have the shares transmitted in the event of death. Members desirous of availing this facility may submit the prescribed Form SH-13/SH-14 to the Registrar & Share Transfer Agent of the Company. For shares held in Demat Form, this form of Nomination must be sent to the concerned Depository Participant and not to the Company or its Registrar & Share Transfer Agent.
RECONCILIATION OF SHARE CAPITAL AU DIT
As stipulated by the Securities and Exchange Board of India, M/s DMK Associates, Company Secretaries have carried out the Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the Report thereon is submitted to the Stock Exchanges and is also placed before the Board of Directors.
The audit, inter alia, confirms that the total listed and paid-up capital of the Company is in agreement with the aggregate of the total number of shares in dematerialized form (held with NSDL and CDSL) and total number of shares in physical form.
UNCLAIMED SUSPENSE ACCOUNT
Pursuant to the relevant Clauses of the Listing Agreement, the Company has credited unclaimed shares to a separate Demat account called “Unclaimed Suspense Account” opened specifically for the purpose and the status of the said account is given in Table 14.
COMPLIANCE WITH CLAU SE 49 OF LISTING AGREEMENT
(a) Mandatory Requirements
The Company has complied with all mandatory requirements of Clause 49.
(b) Extent to which Non-mandatory requirements have been adopted:
i. The Board: Non-Executive Chairman’s Office: The Chairman of the Company is the Executive Chairman and hence this provision is not applicable.
ii. Separate Chairman & Managing Director/CEO:
The Company has an Executive Chairman and two Managing Directors.
iii. Reporting of Internal Auditor:
The Internal Auditors periodically place their Internal Audit Report(s) before the Audit Committee.
COMPLIANCE CERTIFICATE ON THE CORPORATE GOVERNANCE
The certificate dated 12th August, 2015 provided by M/s. RSD & Associates LLP, Company Secretaries [CP No. 714] confirming compliance with the Corporate Governance requirements as stipulated under Clause 49 of the Listing Agreement, forms a part of Board Report as Annexure C.
For and on behalf of the Board of Directors
Date: 13th August, 2015