REPORT ON CORPORATE GOVERNANCE:
(1) A brief statement on Company's philosophy on Code of Governance :
Corporate Governance is the combination of voluntary practices and compliance with laws and regulations leading to effective control and management of the organisation.
The Company's commitment for effective Corporate Governance continues and the Company has always been at the forefront of benchmarking its internal systems and policies within accepted standards so as to facilitate the creation of long term value for its shareholders. The Company has Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Finance Committee, Allotment Committee, Committee of Directors for Capital Issue, Corporate Strategic Planning Committee and these Committees report to Board of Directors about the tasks assigned to them.
The Board of Directors fully supports and endorses Corporate Governance practices as enunciated in Clause 49 of the Listing Agreement as applicable from time to time.
(2) Board of Directors:
As on September 30, 2014, the Board of Directors comprised of a Non-Executive Chairman, a Managing Director & CEO, a Managing Director and 8 other Non-Executive Directors. The Listing Agreement requirement of at least one- half of the Board to be of independent Directors, where the NonExecutive Chairman is a promoter of the Company is met by the Company in view of 6 directors being Independent Directors out of total 11 Directors as on September 30, 2014. The Non-Executive Directors are professionals and have vast experience in the field of industry operations, accounts, finance, taxation, law, banking, administration, management and Research & Development, bringing a wide range of expertise and experience to the Board. As required under the Listing Agreement, the Directors' Report includes the Report on "Management Discussion and Analysis" as Annexure 'A' to Directors' Report. The Board Members are presented with proper notes along with the Agenda papers well in advance before the meeting. Information covering the matters listed as per Annexure-1 to Clause 49 is provided to the Board as a part of Agenda papers.
Code of Conduct :
The Board adopted Revised Code of Conduct for all Board Members and Senior Management of the Company in the Board Meeting held on August 11, 2014. The said Code of Conduct is posted on the Website of the Company (www.walchand.com ).
All Board members and Senior Management personnel have affirmed compliance with the Code on an annual basis and a declaration to this effect by Mr. G. K. Pillai, Managing Director and CEO is attached to this report.
As required under Clause 49(V) of the Listing Agreement with the Stock Exchanges, the Managing Director & CEO and the Chief Financial Officer of the Company have certified to the Board on the financial statements for the Year ended September 30, 2014 and the same is attached to the Report.
The information pursuant to Clause 49(IV)(G) of the Listing Agreement, regarding details of Directors being appointed / re-appointed is provided in the Annexure 'A' to the Notice of the Annual General Meeting.
(3) Audit Committee:
The Audit Committee of the Board comprises of 3 NonExecutive Directors as on September 30, 2014 namely Mr. Dilip J. Thakkar, Dr. P. K. Basu, and Mr. Chakor L. Doshi, out of which two are independent Directors including Mr. Dilip J. Thakkar, the Chairman of the Committee and the requirement of Section 177 of the Companies Act, 2013 and Clause 49(II)(A) of the Listing Agreement have been complied with. The Committee is authorised by the Board in the manner as envisaged under Clause 49 (II)(C) of the Listing Agreement.
The Committee has been assigned task as listed under Clause 49(II)(D) of the Listing Agreement. The Committee reviews the information as listed under Clause 49(II)(E) of the Listing Agreement.
Four Audit Committee Meetings were held during the year 2013-2014 on 27.11.2013, 28.01.2014, 30.04.2014, and 11.08.2014.
The necessary quorum was present for all the meetings.
Mr. Dilip J. Thakkar, Chairman of the Audit Committee was present at the Annual General Meeting held on 28.01.2014.
Managing Director & CEO, Managing Director, Chief Financial Officer, Statutory Auditors and Chief Internal Auditor are the permanent invitee of the Audit Committee. Internal Independent Auditor and other members of the Senior Management have attended when invited to the meetings. Mr. G. S. Agrawal, Vice President (Legal & Taxation) & Company Secretary attended the meetings as Secretary of the Committee. All the members of the Audit Committee are financially literate and possess the requisite accounting and related financial management expertise.
(4) Nomination & Remuneration Committee :
Nomination & Remuneration Committee has been reconstituted w.e.f. 18.04.2014 as per the provisions of the Companies Act, 2013 and as on Setember 30, 2014 comprises of Mr. Chakor L. Doshi and four Independent Directors viz., Dr. P. K. Basu, Mr. Dilip J. Thakkar, Mr. G. N. Bajpai and Dr. Anil Kakodkar. Dr. P. K. Basu is the Chairman of the Committee. Mr. G. S. Agrawal, Vice President (Legal & Taxation) & Company Secretary acts as Secretary to the Nomination & Remuneration Committee.
Nomination and Remuneration Committee is responsible, inter alia, to do the following things as required under Section 178 of the Companies Act, 2013:
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, recommend to the Board their appointment and removal and carry out evaluation of every director's performance.
2) 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.
3) The Nomination and Remuneration Committee shall, while formulating the policy under subsection (3), ensure that -
(a) 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;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) 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:
Nomination& RemunerationPolicy : As per the provisions of Section 178 of the Companies Act, 2013, and Securities and Exchange Board of India Circular CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014, the Nomination and Remuneration Committee in its meeting held on August 11, 2014, recommended the Nomination and Remuneration policy of the Company to the Board and the same was approved by the Board in its meeting held on August 11, 2014.
The Non-Executive Directors do not draw any remuneration from the Company except as mentioned in Item No.2 above. The total amount of sitting fees paid to Non-Executive Directors during the year was * 15.60 Lakhs.
Three Nomination & Remuneration Committee Meetings were held during the year 2013-2014 on 27.11.2013, 30.04.2014 and 11.08.2014.
Shareholding of Non-Executive Directors:
Mr. Chakor L. Doshi holds 55,930 equity shares of the Company including 6,680 equity shares held by his HUF. No other Non Executive Director holds any shares in the Company.
(5) Stakeholders Relationship Committee:
Stakeholders Relationship Committee has been re-constituted as per the provision of the Companies
Act, 2013 w.e.f. 18.04.2014 and Dr. Anil Kakodkar is
the Chairman of the Committee. It comprises of 3 Non-Executive Directors namely Mr. Chakor L. Doshi, Dr. Anil Kakodkar and Mr. Dilip J Thakkar. The composition of the Committee meets the requirement of the Clause 49 of the Listing Agreement. Mr. G. S. Agrawal, Vice President (Legal & Taxation) & Company Secretary acts as a Secretary of the Committee. The Committee is authorised to redress the Shareholder's and Investor's Complaints.
During the year under review, one Stakeholders Relationship Committee Meeting was held on 27.11.2013. The necessary quorum was present at the meeting. Mr. G. S. Agrawal, Vice President (Legal & Taxation) & Company Secretary attended the meeting as Secretary of the Committee.
(6) Share Transfer Matters:
In order to ensure prompt service to Shareholders, the Board of Directors has given authority to Managing Director & CEO and Managing Director of the Company together with Link Intime India Pvt. Ltd., the Registrar & Share Transfer Agent of the Company to approve matters concerning share transfer / transmission, consolidation of shares etc. and all other functions as delegated to Stakeholders Relationship Committee except replacement of lost / stolen / mutilated share certificates which is only approved by the Board of Directors of the Company.
In addition to above committees, the Board has constituted five more committees namely; Finance Committee, Corporate Social Responsibility Committee, Allotment Committee, Committee of Directors for Capital Issue and Corporate Strategic Planning Committee. The composition, functions and attendance of members of the Committees are listed below:
(7) Finance Committee:
The Board of Directors formed Finance Committee to consider and approve borrowing proposals referred / delegated to it by the Board. During the financial year 2010-2011, the powers and responsibilities of Finance Committee were extended in respect of (i) Opening of new Bank Accounts and/or Closure of the Bank Accounts;(ii) Authorizing executives of the company to operate the bank accounts; (iii) Revision in Authorized Signatories to operate existing Bank Accounts of the company; (iv) Availing Internet Banking facilities including e-commerce and/or closure of Internet banking facilities, authorizing executives of the company to operate the said facilities and revision in authorized signatories for operating the said facilities; (v) Authorizing executives of the Company for dealing in Forward Contracts on behalf of the Company and authorize the executives for executing the documents under Common Seal of the Company for availing the said facilities, from time to time. The Committee comprises of three Directors viz. Mr. Chakor L. Doshi, Mr. Dilip J. Thakkar and Mr. G. N. Bajpai. Mr. Dilip J. Thakkar is the Chairman of the Committee. During the financial year 2013-14 under review, five meetings of Finance Committee were held on 19.11.2013, 28.01.2014, 30.04.2014, 11.08.20014 and
(8) Corporate Social Responsibility Committee:
During the Year 2013-2014, the Board has constituted a CSR Committee with the following terms of reference:
(a) To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII;
(b) To recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
(c) To monitor the Corporate Social Responsibility Policy of the company from time to time.
The members of the CSR Committee are Mrs. Bhavna Doshi, Mr. G. K. Pillai and Mr. Chirag C. Doshi. Mrs. Bhavna Doshi is the Chairperson of the Committee.
During the year under review, one CSR Committee Meeting was held on 09.08.2014.
(9) Allotment Committee:
The Board of Directors constituted Allotment Committee for the purpose of allotment of equity shares on conversion of warrants to specified allottees as approved by the shareholders by passing Special Resolution.
The Committee comprises of three Directors viz. Mr. Dilip J. Thakkar, Mr. G. N. Bajpai and Mr. Chakor L. Doshi. Mr. Dilip J. Thakkar is Chairman of the Committee. During the financial year 2013-14 under review, no meeting of the Allotment Committee was held.
(10) Committee of Directors for Capital Issue:
The Board of Directors had constituted 'Committee of Directors for Capital Issue' ('Committee') with regard to create, offer, issue and allot in one or more tranch(es), in one or more foreign markets or domestic markets, to persons and entities whether such persons and/or entities are shareholders of the Company or not, including to Qualified Institutional Buyers, as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as may be amended from time to time, ("SEBI Regulations"), (collectively "Investors").
It comprises of three Directors viz. Mr. Chakor L. Doshi, Mr. Dilip J. Thakkar and Mr. G. N. Bajpai. Mr. G. N. Bajpai is the Chairman of the Committee. During the financial year 2013-14 under review, no meeting of the Committee of Directors for Capital Issue was held.
(11) Corporate Strategic Planning Committee:
The Board of Directors had constituted 'Corporate Strategic Planning Committee' for overseeing and facilitating the development and implementation of the Company's corporate strategy including Long and Short term plans.
It comprises of Four Directors viz. Dr. Anil Kakodkar, Mr. G. N. Bajpai, Mr. Chakor L. Doshi and Mr. Chirag C. Doshi. Dr. Anil Kakodkar is Chairman of the Committee. During the financial year 2013-14 under review, no meeting of the Corporate Strategic Planning Committee was held.
i) Disclosure on materially significant related party transactions i.e. transactions of the Company of material nature with its Promoters, Directors or the Management, their Subsidiaries or Relatives, etc. that may have potential conflict with the interests of the Company at large:
The Audit Committee and the Board consider periodically the statement of related party transactions with details together with the basis at their meetings and grand their approval. However, these transactions are not likely to have any conflict with the interest of the Company.
As required by the Accounting Standards AS-18, the details of related party transactions are given in Note No. 30 to the notes on financial statements for the year ended September 30, 2014, forming part of Accounts.
ii) Management Disclosures :
The Senior Management personnel have made disclosures to the Board relating to all material financial and commercial transactions, if any, where they may have personal interest that may have a potential conflict with the interest of the Company at large. Based on the disclosures received, none of the Senior Management personnel has entered into any such transactions during the year.
iii) Details of non-compliance by the Company, penalties and strictures imposed on the Company by Stock Exchanges or SEBI, or any Statutory Authorities, on any matter related to Capital markets during last three years:
iv) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause.
The Company has complied with all the mandatory requirements on the Corporate Governance as specified in Annexure ID to the Clause 49 of the Listing Agreement with the Stock Exchanges and the Company has also fulfilled the following non-mandatory requirements as prescribed in Annexure ID to the Clause 49 of the Listing Agreement with the Stock Exchanges:
1. Chairman of the Board:
The Chairman's Office with required facilities is provided and maintained at Company's expense for use by its Non-Executive Chairman.
2. Other Committees:
The Company has constituted 6 more committees viz. Nomination & Remuneration Committee, Finance Committee, Corporate Social Responsibility Committee, Allotment Committee, Committee of Directors for Capital Issue and Corporate Strategic Planning Committee of the Board of Directors of the Company.
v) Corporate Identity Number (CIN)
The Corporate Identity Number of the Company allotted by the Ministry of Corporate Affairs, Government of India is L74999MH1908PLC000291.
vi) Compliance Certificate from Auditors on Corporate Governance
Certificate from Statutory auditors M/s. K. S. Aiyar & Co, Chartered Accountants confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this Report.
vii) Reconciliation of Share Capital Audit report (formerly known as Secretarial Audit Report) and Certificate of Compliance with Clause 47(c) of the Listing Agreement
The SEBI vide Circular No. CIR/MRD/DP/30/2010 dated 6th September, 2010 has modified the terminology of 'Secretarial Audit', as 'Reconciliation of Share Capital Audit'. A qualified Practicing Company Secretary has carried out secretarial audit to reconcile the total admitted capital with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) and total issued and listed capital. The 'Reconciliation of Share Capital Audit' (formerly known as Secretarial Audit Report) confirms that the total issued / paid-up capital is in agreement with the total number of shares in physical form and the total number of Dematerialized shares held with NSDL and CDSL. The audit is carried out by M/s. V. N. Deodhar & Co., Practicing Company Secretaries every quarter and report thereon is submitted to the Stock Exchanges along with half yearly Compliance Certificate as per Clause 47(c) of the Listing Agreement and placed before the Board of Directors.
viii) Risk Management Framework:
The Company has laid down procedures to apprise the Board of Directors regarding key risk assessment and risk mitigation mechanisms and the same has been reviewed periodically to ensure that executive management control risk through means of a properly defined framework.
ix) Proceeds from Public Issues, rights issues, preferential issues etc.:
During the financial year 2007-08, the Company had converted 8,00,000 convertible warrants issued on preferential basis. The Company has received entire amount of Rs. 5,072 Lakhs on conversion of the warrants into equity shares. The Company has utilized Rs. 1,516 Lakhs for capital expenditure and the balance amount Rs. 3,556 Lakhs for Working Capital.
(13) Means of Communication:
The Company recognizes the importance of two way communication with shareholders and of giving a balanced reporting of results and progress and responds to questions and issues raised in timely and consistent manner. Shareholders seeking information may contact the Company directly throughout the year.
i) Quarterly, Half Yearly and Annual Results are published in All India Edition of Financial Express in English & Mumbai Lakshadeep in Marathi News papers from Mumbai.
ii) The quarterly, half yearly and annual results and shareholding pattern are also posted on the website of the Company (www. walchand.com). The Shareholding Pattern, Corporate Governance Report, Quarterly, Half Yearly and Annual Results and such other compliances are also filed electronically on NSE Electronic Application Processing System (NEAPS), web based application designed for corporate at https://www.connect2nse.com/LISTING/ and on BSE Online Portal - BSE Corporate Compliance & Listing Centre (the "Listing Centre") at http://listing.bseindia.com/.
iii) Green Initiative:
In support of the "Green Initiative" undertaken by Ministry of Corporate Affairs, the Company had during the year 2013-14 sent various communications including the Annual Report for F.Y. 2012-13, intimation of dividend for the year ending 30th September, 2013, postal Ballot by email to those shareholders whose email addresses were made available to the depositories or the Registrar and Transfer Agents. Physical copies were sent to only those shareholders whose email addresses were not available and for the bounced email cases and who have specifically requested for the same.
As a responsible citizen, your Company strongly urges you to support the Green Initiative by registering/updating your email addresses with the Depositories Participants or the Registrar and Transfer Agents for receiving soft copies of various communications including the Annual Reports.
iv) The Company has designated email@example.com as an email id for the purpose of registering complaints by investors and displayed the same on the Company's website.
v) "Management Discussion and Analysis" is given as Annexure 'A' to the Directors' Report.
vi) No presentations were made to institutional investors or to the analysts during the year.
vii) SCORES is a system implemented by SEBI which enables investors to lodge their complaints electronically on the SEBI website. The investor complaints are processed in a centralized web based complaints redressal system. The salient features of this system are Centralised database of all complaints, online upload of Action Taken Reports (ATRs) by concerned companies and online viewing by investors of actions taken on the complaint and its current status.
(14) General Shareholder information:
i ) AGM : Date, Time & Venue
February 13, 2015 at 04:00 p.m. Walchand Hirachand Hall, Indian Merchants' Chambers Building, Churchgate, Mumbai - 400 020
ii) Financial Calendar
The Company follows October to September as its Financial Year. The results for every quarter beginning from October are declared within 45 days from the end of the quarter except for the last quarter, for which Annual Audited Results are declared within the period of 60 days from the end of the quarter as per Clause 41 under the Listing Agreement.
iii) Date of Book Closure :
February 07, 2015 to February 13, 2015 (Both days inclusive)
iv) Dividend payment date :
February 25, 2015
v) Listing on Stock Exchanges :
BSE Ltd. & National Stock Exchange of India Ltd. The Listing fees for the year 2014-2015 have been paid to both the Stock Exchanges.
vi) Stock Code :
507410 (BSE) and WALCHANNAG (NSE)
vii) Registrar and Transfer Agents
M/s. Link Intime India Pvt. Ltd.
Unit: Walchandnagar Industries Ltd.
C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai 400 078
Ph. No. (022) 25946970-80 Fax No. (022) 25946969 e-mail id: firstname.lastname@example.org
viii) Share Transfer System
Shareholders are permitted to hold shares in Physical form or in Demat Form. In case of shares held in Physical form, shareholders are informed to lodge the shares for transfer purpose to the Registrars and Share Transfer Agents and the Company is taking care to ensure that share transfer work gets completed as early as possible and not later than 15 days period. The transfers are being approved once in a week. In case the shares are transferred through Demat mode, the procedure is adopted as stated in Depositories Act, 1996.
ix) Dematerialization of Shares and Liquidity :
As stated earlier, the Company's shares are listed on the Stock Exchanges. As per the SEBI notifications, trading in Company's shares has been made compulsorily in Dematerialised form w.e.f. 26th December, 2000 and Company's Registrar & Transfer Agents have connectivity with NSDL & CDSL. The ISIN No. is INE711A01022. As on September 30, 2014, 36,867,819 equity shares representing 96.84% of the total shares have been Dematerialised. The members holding shares in physical form are requested to get the shares converted into demat form as per the prescribed procedure. The shares of the Company are traded in the "B" group.
x) National ECS Facility
As per RBI notification, with effect from October 1, 2009 the remittance of money through ECS is replaced by National Electronic Clearing Services (NECS) and banks have been instructed to move to the NECS platform.
NECS essentially operates on the new and unique bank account number, allotted by banks post implementation of Core Banking Solution (CBS) for centralized processing of inward instructions and efficiency in handling bulk transaction.
In this regard, shareholders holding shares in electronic form are requested to furnish the new 10-digit Bank Account Number allotted to you by your bank along with photocopy of a cheque pertaining to the concerned account, to your Depository Participant (DP). Please send these details to the Company/ Registrars, if the shares are held in physical form, immediately.
If your bank particulars have changed for any reason, please arrange to register the NECS with the revised bank particulars.
The Company will use the NECS mandate for remittance of dividend either through NECS or other electronic modes failing which the bank details available with Depository Participant will be printed on the dividend warrant. All the arrangements are subject to RBI guidelines, issued from time to time.
xi) Unclaimed Dividends :
Under the Companies Act, 1956, Dividends that are unclaimed for a period of seven years is required to be transferred to the Investor Education and Protection Fund administered by the Central Government. After completion of seven years, no claims shall lie against the said Fund or the Company for the amounts of Dividend so transferred nor shall any payment be made in respect of such claims.
Separate intimation has been given in the notice convening 106th Annual General Meeting, a part of this 106th Annual Report. Members are requested to utilize this opportunity and get in touch with Company's Registrar and Share Transfer Agent, M/s. Link Intime India Pvt. Ltd., C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai - 400 078 for encashing the unclaimed Dividend for the financial year 2006-2007 and for subsequent years standing to the credit of their account.
The details of Unclaimed amount of Dividend/matured Fixed Deposit/ matured Interest on Fixed Deposit are now available on the website of the Company.
xii) Unclaimed Equity Shares
SEBI has amended Clause 5A of the Listing Agreement to provide that shares held physically which may have remained unclaimed by shareholders due to insufficient/incorrect information or for any other reason should be transferred in demat mode to one folio in the name of "Unclaimed Suspense Account" with one of the Depository Participants. The Company has sent three reminders as required in the Clause 5A to the concerned shareholders and separate bank Account opened and is taking steps to transfer the unclaimed shares into Unclaimed Suspense Account.
xiii) Outstanding GDRs / ADRs / Warrants or any other Convertible Instruments, Conversion date and likely impact on equity :
No instrument is outstanding for allotment or conversion.
xiv) Plant Locations :
The Company currently has 3 plants located as follows
1. Walchandnagar, Dist. Pune, Maharashtra
2. Satara Road, Dist. Satara, Maharashtra
3. Attikola Dharwad, Karnataka
xv) Address for correspondence
a) For Correspondence relating to shares:
Link Intime India Pvt.Ltd.
Unit: Walchandnagar Industries Ltd.,
C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai 400 078
Ph.No. (022) 25946970-80 Fax No.(022) 25946969 Email : email@example.com
b) For other matters (At Company's registered Office)
Walchandnagar Industries Ltd.
3, Walchand Terraces Tardeo Road, Mumbai 400 034
Tel: 022 40287104 / 110 Fax: 022 23634527 Email: firstname.lastname@example.org ; email@example.com
xvi) Company Website
The Company has its website namely www.walchand.com . The website provides detailed information about the Company, its products and services offered, locations of its corporate offices and various sales offices etc. The Quarterly Results, Annual Reports and Shareholding patterns are updated on the website of the Company.
xvii) Prevention of Insider Trading
In accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations 1992, the Company has instituted a comprehensive Code of Conduct for Prohibition of Insider Trading in the Company's Shares.