CORPORATE GOVERNANCE REPORT
1. Company's Philosophy on Code of Governance
Corporate Governance is a combination of voluntary practices and compliance with laws and regulations leading to effective control and management of the Company. The Company believes that good corporate governance contemplates that corporate actions balance the interests of all stakeholders and satisfy the tests of accountability, transparency and fair play. The Company believes that all its operations and actions must be directed towards enhancing overall shareholder value.
2. Board of Directors
The composition of the Board of Directors, attendance of Board of Directors at Board Meetings and Annual General Meeting and other relevant details are given below:
During the 18 months period ended 31st March, 2014, seven Board meetings were held on 29th November, 2012, 04th February, 2013, 10th May, 2013, 29th July, 2013, 14th August, 2013, 13th November, 2013 and 13th February, 2014.
3. Audit Committee
The terms of reference of the Audit Committee are given below:
1. To have discussions with the auditors periodically about internal control systems, the scope of audit including the observations of the auditors and review the half yearly and annual financial statements before submission to the Board and ensure compliance of internal control systems.
2. To oversee the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
3. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
4. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
5. Reviewing, with the management, the annual financial statements 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 (2AA) of Section 217 of the Companies Act, 1956.
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 judgement 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.
6. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.
7. 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.
8. Reviewing or approving all related party transactions to ensure they are conducted on an arm's length basis, that is, the transaction terms and prices are not more favourable to the related party than if they were transacted with a third party and will not be prejudicial to the interest of Company and its minority shareholders.
9. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
10. 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.
11. Discussion with internal auditors on any significant findings and follow up there on.
12. 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.
13. 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.
14. To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non payment of declared dividends) and creditors.
15. To review :
(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 letters/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.
16. To review the financial statements, in particular the investments made by the unlisted subsidiary company, if any.
17. To approve appointment of Chief Financial Officer (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 and background, etc. of the candidate.
The Audit Committee comprises of independent non-executive Directors namely Mr.Praveen Singh, Ms. Armin Pardiwala and Mr Khurshed M. Thanawalla (till 30th March 2014) and the members meet the requirements of clause 49 of the Listing Agreement. Mr.Praveen Singh is the Chairman of the Audit Committee. Ms Armin Pardiwala was appointed as member of the Audit Committee at the Board meeting held on 29th July, 2013.
During the 18 months period ended 31st March, 2014, six Audit Committee Meetings were held on 29th November, 2012, 04th February, 2013, 10th May, 2013, 14th August, 2013, 13th November, 2013 and 13th February, 2014.
4. Remuneration Committee
The Remuneration Committee comprises of independent non-executive Directors, namely, Mr.Praveen Singh, Mr Khurshed M. Thanawalla (till 30th March 2014) and Ms. Armin Pardiwala. The Chairman of the Committee is Mr.Praveen Singh. During the 18 months period ended 31st March, 2014 no Remuneration Committee meeting was held.
The Remuneration Committee inter-alia determines the company policy on specific remuneration package for Executive Directors including pension rights and any compensation payment.
The remuneration of the Executive Directors is decided by the Board of Directors based on the recommendation of the Remuneration Committee.
The Company has no pecuniary relationship or transactions with its non-executive Directors other than payment of sitting fees to them for attending Board and Committee meetings, payment of commission, if any, which has been approved by the shareholders, payment of dividend on equity shares held by the Directors in the Company and payment of professional fees, if any, paid to a firm in which one of the non-executive Directors is a partner.
The remuneration policy is directed towards rewarding performance. It is aimed at attracting and retaining high calibre talent. The criteria for making payment of remuneration to non-executive Directors is based on their roles and responsibilities and their contribution to the Company. The remuneration of non-executive Directors is already approved by shareholders. Distribution of this remuneration amongst non-executive Directors is determined by the Chairman.
The Company had entered into agreement dated 16th August, 2012 with Mr.Yudhishthir D. Khatau re-appointing him as Vice Chairman & Managing Director with effect from 25th August, 2012 to 30th September, 2012 and thereafter was appointed as Chairman & Managing Director with effect from 19th October, 2012 to 24th August, 2017. In terms of the said agreement, Mr.Yudhishthir D. Khatau may resign from his office upon giving three months notice in writing to the Company and his services can be terminated by the company by giving him three months notice in writing. Further, in the event of loss of his office, Mr.Yudhishthir D. Khatau shall be paid compensation which shall be equal to the remuneration which he would have earned if he had been in office for the unexpired residue of his term or for three years whichever is shorter, calculated on the basis of average remuneration actually earned by him during a period of three years immediately preceding the date on which he ceased to hold the office or where he held the office for a lesser period than three years, during such period, subject to the provisions of Section 318 and other applicable provisions of the Companies Act, 1956 including any statutory amendment(s) or modification(s) or re-enactment(s) thereof for the time being or from time to time in force.
The Company does not have any Stock Option Scheme.
5. Shareholders/Investors Grievance Committee
The Shareholders/Investors Grievance Committee consists of three members and is headed by Mr. Praveen Singh, an independent non-executive Director. During the 18 months period ended 31st March, 2014, 701 complaints were received from the shareholders/investors in addition to 1 unresolved complaints carried forward from previous year. As on 31st March, 2014 out of 702 , 119 complaints were replied/resolved to the satisfaction of the shareholders/investors and balance were carried forward to next quarter.
All valid requests for share transfers received during the 18 months period ended 31st March, 2014 have been acted upon by the Company/Datamatics Financial Services Limited, Registrar and Transfer Agents of the Company and no transfers were pending as on 31st March, 2014.
6. General Body Meetings
The previous three Annual General Meetings of the Company were held at 11.00 a.m. on 4th August, 2010, 11th August, 2011 and 04th February, 2013 at Y.B.Chavan Centre, General Jagannath Bhonsle Marg, Sachivalaya, Mumbai 400001.
Special Resolutions relating to re-appointment of and payment of remuneration to Mr.Haider Nawaz; ratification and confirmation of payment of excess remuneration to Mr.Arun Mehta, then Chairman & Managing Director and; Mr.Yudhishthir D. Khatau, then Vice Chairman & Managing Director for the financial year ended 31st March, 2010 and variation in terms of minimum remuneration, payable to Mr.Arun Mehta, then Chairman & Managing Director and Mr.Yudhishthir D. Khatau, then Vice Chairman & Managing Director for the period from 1st April, 2010 to 31st March, 2012 were passed at the Annual General Meting held on 4th August, 2010.
Special Resolutions relating to re-appointment and payment of remuneration including minimum remuneration to Mr.Arun Mehta, then Chairman & Managing Director for the period 1/4/2012 to 30/9/2012 and appointment and payment of remuneration including minimum remuneration to Mr.Yudhishthir D. Khatau, Chairman & Managing Director for the period 25/8/2012 to 24/8/2017 were passed at the Annual General Meting held on 4th February, 2013.
No Special Resolution was passed during the 18 months period ended 31st March, 2014 through postal ballot.
a) There were no materially significant related party transactions that may have had potential conflict with the interests of the Company, at large.
b) In the preparation of the financial statements, the Company has followed the Accounting Standards issued by the Institute of Chartered Accountants of India.
c) The Company has complied with the requirements of Stock Exchanges, Securities and Exchange Board of India and other statutory authorities on matters relating to capital markets during the last three years and consequently no penalties, strictures have been imposed on the Company by these authorities.
d) The Company has not adopted a Whistle Blower policy.
e) The Company has complied with mandatory requirements of Clause 49 of the Listing Agreement and has not adopted the non-mandatory requirements specified under Clause 49 other than constitution of a Remuneration Committee.
8. Means of Communication
As half yearly results as well as quarterly and annual results are published in newspapers, submitted to the Stock Exchanges in accordance with the Listing Agreement and also hosted on Company's website www.varunship <http://www.varunship/>.com the half yearly reports are not sent to each household of shareholders. These results are normally published in Free Press Journal and Navshakti.
The official news releases are intimated to the Stock Exchanges and also displayed on the Company's website. As and when presentations are made to Analysts, the same are hosted on the Company's website.
The Management Discussion and Analysis forms a part of the Directors' Report in the Annual Report.
9. General Shareholder Information
Financial Year : 1st October, 2012 to 31st March, 2014
(18 months period)
Financial Reporting for
Financial Reporting for
Quarter ended December, 2012 4th February, 2013
Quarter ended March 2013 10th May, 2013
Quarter ended June, 201314th August, 2012
Quarter ended September, 201313th November, 2013
Quarter ended December, 201413th February, 2013
Results for the 18 months period ended 31stMarch, 2014------------
Date of Book Closure ___________
Listing on Stock Exchanges:
The Company's equity shares are listed on Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 and National Stock Exchange of India Limited, Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai- 400051. Annual listing fees are being paid to each of the said stock exchanges as and when they fall due for payment.
Stock Codes Equity Shares (Physical form) Equity Shares (Demat Form)
BSE Limited 465 500465
National Stock Exchange of India Limited -VARUNSHIP
The Company's equity shares form part of SEBI's compulsory demat segment bearing ISIN No.INE 702A01013. All the equity shares have been admitted for dealing by both National Securities Depository Limited and Central Depository Services (India) Limited.
Registrars and Transfer Agents:
Datamatics Financial Services Limited, Plot No.A-16 & A-17, Part "B" Crosslane, MIDC
Andheri (East), Mumbai - 400093
Tel : + 91 22 6671 2151-2160 Fax : + 91 22 2821 3404 E-mail : email@example.com
Share Transfer System :
Applications for transfer of shares in physical form are processed by the Company's Registrars and Transfer Agents, Datamatics Financial Services Limited. The Share Transfer Committee constituted for transfer/ transmission of shares, issue of duplicate share certificates and allied matters considers and approves the share transfers once in a fortnight subject to transfer instruments being valid and complete in all respects.
Demat requests are generally processed and completed within an average period of 14 days from the date of receipt provided they are otherwise in order.
Promoter Group Disclosures
The promoter of the Company is Yudhishthir D. Khatau Group which is controlled by Mr.Yudhishthir D. Khatau.
For the purposes of inter-se transfer of shares under Regulation 10(1)(a) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 [erstwhile SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997], the following persons/entities/individuals are included in the "Group" as defined in the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969):
Sr. No. Name of the Person/Entities
1. Mr.Yudhishthir D. Khatau
2. Varun Corporation Limited (formerly known as Khatau International Limited)
3. Tarun Shipping and Industries Limited
4. Sunbeam Talc Private Limited
5. Realpoint (Mauritius) Limited, Mauritius
6. Azure Seas Logistics
7. Mountview Investments Limited
8. Yuka Plantations Pvt Ltd
9. Varun Maritime Ltd
10. Varun Resources Ltd
11. Varun Global Ltd
The Company has received intimation in this regard from the Promoters.
Dematerialisation of Shares and liquidity:
97.89 % of the equity shares have been dematerialized as on 31st March, 2014. The Company's shares are regularly traded on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
Outstanding GDRs/ADRs/Warrants or any Convertible Instruments :
There are no outstanding GDRs/ADRs/Warrants or any other Convertible Instruments.
The Company does not have any plants since it is primarily engaged in the business of shipping and ship management activities.
Address for Correspondence :
With the Registrars and Transfer Agents
Datamatics Financial Services Limited, Plot No.A-16 & A-17, Part "B" Crosslane, MIDC Andheri (East), Mumbai - 400093
Tel : + 91 22 6671 2151-2160 Fax : + 91 22 2821 3404
E-mail : firstname.lastname@example.org
With the Company
Varun Shipping Company Limited, Laxmi Building, 6, Shoorji Vallabhdas Marg, Ballard Estate,
Mumbai - 400 001.
Tel : + 91 22 6635 0100-09
Fax : + 91 22 6635 0274
E-mail: email@example.com E-mail of grievance redressal division : firstname.lastname@example.org