REPORT ON CORPORATE GOVERNANCE
Company's Philosophy on Corporate Governance
Good Corporate Governance is the adoption of best business practices which ensure that the company operates not only within the regulatory framework, but is also guided by ethics. The adoption of such corporate practices ensures accountability of the persons in charge of the company and brings benefits to investors, customers, creditors, employees and the society at large. The company firmly believes in practicing good Corporate Governance in true spirit and endeavor to improve on these aspects as ongoing process.
Corporate Governance is based on transparency, accountability, fairness, equity and social responsibility and compliance of which guide the company towards fulfilling the consistently high standards of Corporate Governance. Your company makes its best efforts to uphold and nurture these core values in its operations.
Board of Directors
a) Composition of the Board
The Board of Directors of the Company is a combination of promoters, executive, non-executive, nominee(s) and independent directors. Presently, there are 8 directors on the Board including the Chairman and Managing Director. Chairman is a Non-Executive Director and is nominated by UPSIDC.
b) Number of Board Meetings
During the year ended 30th June, 2007 meetings of the Board of Directors were held on:-
(1) 25th August, 2006, (2) 25th August, 2006, (3). 30th October, 2006 (4) 31st January, 2007 (5) 27th April, 2007.
c) Notes & Disclosures
i) All Directors other than Sh. M. P. Singh, Managing Director & Sh. Vipul Jindal, Whole Time Director are Non-Executive Directors on Board. Mr. Vipul Jindal has since resigned wef 29.06.07.
ii) The Company has effected no material transaction with any of the Non-Executive Directors during the year under review.
iii) None of the Director is member in more than ten Committees or a Chairman of more than five committees across all Companies in which he/she is a director as required under clause 49 of the Listing Agreements.
Information to Board
It is the company policy and practice that apart from matters requiring the Board approval under law, all major decisions affecting the operations of the Company are placed before the Board for consideration and approval. The information regularly provided to the Board includes the following: Annual operating plans and budgets and any updates. Capital budgets and any updates. Quarterly/Half Yearly/ Yearly Results of the company.
Minutes of all meetings of Committees of the Board, as also resolutions passed by circulation. The information on recruitment and remuneration of senior officers/executives. Show cause, demand, prosecution notices and penalty notices, which are materially important. Any fatal or serious accidents, dangerous occurrences, any material or pollution problems. Sale and acquisition of material nature, of assets, investments, etc. which is not in normal course of business. Industrial disputes, it any
Board of Committee
a) Audit Committee
The Audit Committee constituted by the Company consists of three non- executive/ independent Directors viz. Sh. A. K. Bajaj. Dr. B. D. Dikshit, Sh. Rajeev Kumar Gupta while Sh. M. P. Singh is a permanent invitee to this Committee.
The terms of the reference of the Audit Committee are in accordance with Clause 49 (ii) of the Listing Agreements entered into with Stock Exchanges and inter-alia includes the followings: -
i) Overseeing the Company's financial reporting process and ensuring correct, sufficient and credible disclosure of financial information;
ii) Recommending appointment and removal of statutory or any other external auditors and fixing of their remuneration;
iii) Reviewing with management, the annual financial statements with special emphasis on accounting policies and practices, compliance of accounting standards and other legal requirements concerning financial statements;
iv) Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.
v) Reviewing the adequacy of the Audit and Compliance functions, including their policies, procedures, techniques and other regulatory requirements.
vi) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders and creditors. The Committee is chaired by Sh.A. K. BajaL During the year under review, four meetings were held on 25th August, 2006, 30tn October, 2006
b) Remuneration Committee
Terms of reference:
The committee reviews and recommends the salaries, commission, service agreements and other employment conditions for the Executive
Directors based on their performance and defined assessment criteria.
The Remuneration Committee constituted by the Board of company consists of Sh. A. K Bajaj, Dr. B. D. Dikshit and Sh. S.K. Mittal. During the financial year ended on 30th June 2007, One meeting of the committee was held on 25.08.2007 to consider & recommend the remuneration of Sh. Vipul Jindal, Whole time Director.
c) Shareholders/Investors Grievance Committee
The Share Transfer Committee which was formed in July, 1992, reconstituted in June, 1994, re-structured as Shareholders/Investors Grievance Committee in April, 2001, and reconstituted in April 2003. The Committee was again reconstituted to increase the strength of the Committee members in August 2006.
The main areas and functions looked after by this Committee are as under:
- redressal of shareholaers & investors complaints relating to transfer of snares, non-receipt of Balance Sheet, etc.
- consolidation and sub-division of share certificates.
- approving transfer(s), transmission(s) and issue of duplicate share certificates.
- Any other matter relating to the shareholders/investors grievance.
This Committee consists of Sh. M.P. Singh, Sh. Vipul Jindal, Sh. Raieev Kumar Gupta and Smt. Shashi Rani, Directors of the Company. Sh. Nitin Jain, Company Secretary of the Company is the Compliance Officer of this Committee.
During the year 2006-2007. 24 Shareholders/Investors Grievance Committee meetings of the Board were held and no demat/transfer request were pending as on 30.6.2007.
Means of Communication
¦ All the quarterly financial results (limited review results) published in the proforma prescribed under the Listing Agreements are approved by the Board of Directors and thereafter intimated to the Stock Exchanges and also published in the daily newspapers generally in Jansatta (Hindi) & Financial Express (English).
¦ As per the requirement of Clause 51 of the listing Agreements, all the data relating to quarterly financial results, shareholding pattern etc are being electronically filed on the EDIFAR website (www.sebiedifar.nic.in).
¦ Management Analysis Report is the part of the Annual report.
i) Disclosures on materially significant related party transactions i.e transactions of the Company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interest of the company at large:
During the financial year 2006-2007, none of the transaction has been executed with relatives or related party / enterprise.
ii) Detail of non- compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or statutory authority, on any matter related to the capital markets, during the last three years:
The Stock Exchange, Mumbai has suspended trading permission of the Company in 2003, which was restored w.e.f. 07.01.2005. The BSE has charged Rs.64500/- as restoration/reallocation fee.
Dematerialization of shares and Liquidity
The Company has entered into an Agreement with both the Depositories registered under the Depositories Act, 1996, i. e NSDL and CDSL to facilitate holding and trading of the shares of the company in dematerialized form in accordance with the provisions of the aforesaid Act. As per SEBI guidelines, ordinary shares of the company are compulsory traded in the dematerialized form with effect from 5th September 2000. As on 30th June 2007, 17293933 shares representing 45.27 % of the total ordinary share capital of the Company are in dematerialized form. The International Securities Identification Number (ISIN) of the Company, as allotted by NSDL and CSDL is INE 972B01010.
Outstanding GDRs/ADRs/ Warrants or any convertible instruments Conversion date and likely impact on equity: NONE.
Annual General Meeting
The Sixteenth Annual General Meeting of the Company will be held on Wednesday the 24th October, 2007 at 10.00 A.M. at the Registered Office situated at Shiv Shakti Nagar, Tehsil Chandausi, Distt. Moradabad, U.P.
The register of members and transfer books of the Company will remain closed from Thursday the 18th October 2007 to Saturday the 20th October 2007 (both days inclusive).
Individual Shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares shall be transferable in the case of death of concerned registered shareholders. The prescribed form for such nomination can be obtained from the company/ transfer agent. Nomination facility in respect of shares held in electronic form is also available with depository participant as per the by-laws and business rules applicable to NSDL & CDSL.