Composition Of Board Committees:

The Company has an optimum combination of Executive and Non-Executive Directors in its Board and comprises of six Directors, each having expertise in their field of operation.

The total number of Non-Executive Directors and Independent Directors is more than 50% of the total number of Directors which is in conformity with the requirement of Clause 49 of the Listing Agreement. The Chairman of the Board is a Non- Executive Independent Director, as per clause 49 of the Listing Agreement with the Stock Exchanges.

None of the Directors is a Director in more than 15 public companies and member of more than 10 committees or acts as Chairman of more than 5 committees across all companies in which they are Directors. (For the purpose of reckoning the limit under this para, chairmanship / membership of the Audit Committee and the Shareholders' Grievance Committee alone has been considered as specified in Clause 49 of Listing Agreement).

The Non-Executive Directors, including Independent Directors on the Board, possess experience and specialization in diverse fields such as legal, finance, banking, administration etc.

The Composition of the Board, Directorship/Committee positions in other companies as on 31st March, 2012, number of Meetings held and attended during the year are as follows:
Name of the Directors Category Board Meetings during Financial Year 2011-12 Attendance at last AGM held on 01.08.2011 Other Directorships Other Committee positions
Held Attended Private Company Public Company Chairman Member
Mr. G. P. Gupta NED (I) 4 4 Yes 3 10 5 3
Mr. S. K. Saboo NED 4 4 Yes - 3 - -
Mr. R. K. Krishnamurthi NED (I) 4 4 Yes - 3 - 1
Mr. G. C. Vasudeo NED (I) 4 4 Yes 1 3 - 1
Mr. Krishna Kumar Karwa ED 4 4 Yes 2 5 1 2
Mr. Prakash Kacholia ED 4 4 Yes 2 5 1 -
Note: Category: NED – Non-executive Director, NED (I) – Non-executive Director and Independent, ED–Executive Director & Promoter

Board Meetings:

During the Financial Year 2011-2012, 4 Meetings were held. These meetings were held on 20th May, 2011, 1st August, 2011, 22nd October, 2011 and 21st January, 2012.


The gap between any two Meetings did not exceed four months.


The Company Secretary prepares the agenda papers in consultation with the Managing Directors and circulates the same to each Director sufficiently before Board and Committee Meeting. All material information is incorporated in the agenda for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the agenda, the same is tabled before the meeting with specific reference to this effect in the agenda. In special and exceptional circumstances, additional or supplementary item(s) on the agenda are permitted.


To enable the Board to discharge its responsibilities effectively, the Managing Director appraises the Board at every meeting on the overall performance of the Company, followed by the detailed presentation.


The Board periodically reviews strategies, business plans, annual operating and capital expenditure budgets and evaluates the functions of the management in order to meet
shareholders' aspiration. Some of the important matters that are considered in the meeting of the Board are:
  • The minutes of the Board meeting of unlisted subsidiary companies.
  • Minutes of the meetings of Audit Committee and other Committes of the Board.
  • Declaration of Independent Directors at the time of appointment/annually.
  • Annual operating plans of businesses, capital budgets and any updates.
  • Statement of all significant transactions, related party transactions and arrangements of the subsidiary companies.
  • Quarterly results of the Company.
  • Annual Financial results of the Company, Auditor's Report and the Report of the Board of Directors.
  • Dividend declaration.
  • Compliance Certificate certifying compliance with all the laws as applicable to the Company.
  • Consideration and review of investments and exposure limits.
  • Action taken report on the decisions taken at the previous meeting of the Board and other Committees.

The information as specified in Annexure "IA" to Clause 49 of the Listing Agreement is regularly made available to the Board, whenever applicable, for discussion and consideration.

The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. A draft of the minutes is circulated to all the members of the Board/Board Committee for their comments.


Code of Conduct:

The Board of Directors has laid down a Code of Conduct for all the Board members and all the employees in the management grade of the Company. The code covers, amongst other things, the Company's commitment to honest & ethical personal conduct, transparency and compliance of laws & regulations. The Code of Conduct is posted on the website of the Company i.e. www.emkayglobal.com.

The Board of Director and senior management personnel have confirmed compliance with this code. A declaration to this effect signed by the Managing Directors is annexed to this report as Annexure-1.

Committees of Directors

Audit CommitteeComposition
The present composition of the Audit Committee is as follows:
  • Mr. G. C. Vasudeo (Chairman)
  • Mr. G. P. Gupta (Member)
  • Mr. R. K. Krishnamurthi (Member)
  • Mr. Prakash Kacholia (Member)
The Audit Committee comprises of three Non-Executive Independent Directors and one Executive Director. The Chairman of the Audit Committee, Mr. G. C. Vasudeo is a Non-Executive Independent Director having expertise in the field of accounting and related financial management. All the members of the Committee are financially literate. The Statutory Auditors, Internal Auditors and Head of Finance & Accounts are permanent invitees to the Meetings. Mr. Rahul Sahasrabuddhe, Company Secretary, acts as the Secretary of the Committee.

Meetings
During the Financial:During the Financial Year 2011-12, four Meetings were held. These meetings were held on 20th May, 2011, 1st August, 2011, 22nd October, 2011 and 21st January, 2012. The gap between any two Meetings did not exceed four months. The attendance of each Committee member was as under:
Name No. of Meetings attended
Mr. G. P. Gupta 4
Mr. G. C. Vasudeo 4
Mr. R. K. Krishnamurthi 4
Mr. Prakash Kacholia 4


Terms of Reference
The terms of reference of Audit Committee are described below:
  • Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
  • 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.
  • Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
  • Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:
    • 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.
    • Changes, if any, in accounting policies and practices and reason for the same.
    • Major accounting entries, involving estimates, based on the exercise of judgment by management.
    • Significant adjustment made in the financial statements arising out of audit findings.
    • Compliance with listing and other legal requirements to financial statements.
    • Disclosure of any related party transaction.
    • Qualifications in the draft audit report.
  • Reviewing, with the management, the quarterly financial statements before submission to the board for approval.
  • Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
  • Reviewing the adequacy of internal audit function, if any, 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.
  • Discussion with internal auditors on any significant findings and follow up there on.
  • 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.
  • Discussion with statutory auditors before the audit commences, about nature and scope of the audit as well as post-audit discussion to ascertain any area of concern.
  • To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.
  • To review the functioning of the Whistle Blower mechanism, in case the same is existing.
  • 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 utilizations of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.
  • Approval of appointment of 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.
  • Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
  • Committee will also function terms of reference as amended from time to time by SEBI.

The Audit Committee reviews the following:
  • Management's Discussions and Analysis of Company’s Operations.
  • Periodical Internal Audit Reports.
  • Letters of Statutory Auditors to management on internal control weakness, if any.
  • Appointment, removal and terms of remuneration of Internal Auditors.
  • Significant related party transactions.
  • Quarterly and annual financial statements, including investments made by the Subsidiary Companies.

Remuneration/Compensation Committee

Composition
The present composition of the Remuneration/Compensation Committee is as follows:
  • Mr. G. P. Gupta (Chairman)
  • Mr. S. K. Saboo (Member)
  • Mr. R. K. Krishnamurthi (Member)
  • Mr. G. C. Vasudeo (Member)
The Committee comprises of only Non-Executive Directors as its members. All the members of the committee are Independent Directors except Mr. S. K. Saboo.

Meetings
During the Financial Year 2011-12, three Meetings were held. These meetings were held on 2nd May, 2011, 22nd October, 2011 and 21st January, 2012. The attendance of the members was as under:
Name of the Committe Member No. of Meetings attended
Mr. G. P. Gupta 3
Mr. S. K. Saboo 3
Mr. R. K. Krishnamurthi 3
Mr. G. C. Vasudeo 3

Terms of Reference

The Remuneration/Compensation Committee shall determine the companies’ policy on specific remuneration packages for Executive Directors, including pension rights and any compensation payment and carry out the role as per the corporate governance regulations framed by the authorities from time to time.

The Remuneration/Compensation Committee shall also meet as and when required for the purpose of proper administration and implementation of the ESOP Schemes formulated by the Company from time to time.

The main function of the committee will include implementation, administration and superintendence of the ESOP Scheme formulated by the Company from time to time and formulation of the detailed terms and conditions for the same including:

  • The quantum of options to be granted under an ESOP Scheme per employee and in aggregate.
  • The eligibility criteria
  • The schedule for vesting of Employee Stock Options;
  • The conditions under which the Employee Stock Option vested in employees may lapse in case of termination of employment for misconduct;
  • The procedure for making a fair and reasonable adjustment to the number of Employee Stock Options and to the Exercise Price in case of a corporate action such as rights issues, bonus issues, merger, sale of division and others.
  • The procedure and terms for the Grant, Vest and Exercise of Employee Stock Option in case of employees who are on long leave;
  • The procedure for cashless exercise of Employee Stock Options, if required;
  • Approve forms, writings and/or agreements for use in pursuance of the ESOP Schemes.
  • Frame suitable policies and systems to ensure that there is no violation of (a) Securities and Exchange Board of India (Insider Trading) Regulations, 1992 and (b) Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995, by any employee.
  • Frame any other byelaws, rules or procedures as it may deem fit for administering ESOP.

Remuneration Policy
The Board of Directors and Remuneration / Compensation Committee of Directors are authorized to decide the remuneration of Executive Directors, subject to the approval of
the Members and Central Government, if required. Payment of remuneration to the Managing Directors is governed by the letter of appointment issued to them by the Company, containing the terms and conditions of appointment approved by the Board of Directors and Remuneration / Compensation Committee and the Shareholders. The remuneration structure comprises of salary, perquisites, retirement benefits and performance linked bonus. The Non-Executive Directors do not draw any remuneration from the Company other than sitting fees and such commission, as approved by the Shareholders at the Annual General Meeting held on 30th August, 2010. No stock options are granted to the Directors of the Company. The Non–Executive Directors of the Company do not hold any equity shares in the Company.

Details of Remuneration paid to Executive Directors for the Financial Year 2011-12.
The tenure of Mr. Prakash Kacholia as Managing Director and Mr. Krishna Kumar Karwa as Managing Director & CFO ended on 30th September, 2010. On the basis of the recommendation of the Remuneration/Compensation Committee and the Board of Directors of the Company at their meeting held on 27th July, 2010, the Members of the Company at their meeting held on 30th August, 2010 approved their re-appointment and payment of remuneration for a period of three years with effect from 1st October, 2010.

Due to inadequacy of profits during the financial year 2010- 2011, the remuneration paid to Mr. Prakash Kacholia and Mr. Krishna Kumar Karwa for the period from 1st October, 2010 to 31st March, 2011 exceeded the limits as prescribed under Section 198 read with Schedule XIII of the Companies Act, 1956. In compliance with the provisions of the Companies Act, 1956, the Company made an application to the Ministry of Corporate Affairs for approving their appointment and payment of remuneration in excess of the limits prescribed, for a period of three years with effect from 1st October, 2010.

Ministry of Corporate Affairs had approved their reappointment and payment of Remuneration of Rs. 73,20,000/- per annum to Mr. Prakash Kacholia and Rs. 99,33,336/- per annum to Mr. Krishna Kumar Karwa vide their approval letter dated 27th October, 2011 as against Rs. 1,57,08,000/- per annum each, approved by the Members of the Company on 30th August, 2010.

The Company further made a representation to the Ministry of Corporate Affairs with a request to amend the said approval for Mr. Prakash Kacholia. In view of the said representation, the Ministry of Corporate Affairs on 27th April, 2012, approved the payment of remuneration of  Rs. 84,00,000/- per annum in lieu of Rs. 73,20,000/- for Mr. Prakash Kacholia.

As the Managing Directors of the Company are sharing equal responsibility and are jointly steering the Company since its incorporation, considering the fact that the Ministry of Corporate Affairs has not approved equal amount of managerial remuneration, the Remuneration / Compensation Committee and the Board of Directors have decided to pay remuneration not exceeding Rs. 73,20,000/- per annum to both the Managing Directors of the Company.

Remuneration paid to Managing Directors for the Financial Year 2011-2012

Particulars Mr. Krishna Kumar Karwa(Managing Director & CFO) Mr. Prakash Kacholia (Managing Director)
Salary (including PF Contribution) *86,28,000 *86,28,000
Perquisites 0 0
Total *86,28,000 *86,28,000


*Includes Rs. 13,08,000 for the financial year 2010-2011 accounted in Financial Year 2011-2012 consequent to Central Government's Approval.

The Non-Executive Directors are paid remuneration by way of Sitting Fees and Commission:

Details of Remuneration paid by way of Sitting Fees to Non-Executive Directors for the Financial Year 2011-2012

Name Sitting Fees for Meetings attended
(Amt in Rs.) Board/Committee
Mr. G. P. Gupta 1,10,000
Mr. S. K. Saboo 70,000
Mr. R. K. Krishnamurthi 1,10,000
Mr. G. C. Vasudeo 1,10,000
Total 4,00,000


Investor Grievance and Share Transfer Committee Composition
The present composition of the Investor Grievance and Share Transfer Committee is as follows:
  • Mr. R. K. Krishnamurthi (Chairman)
  • Mr. Prakash Kacholia (Member)
  • Mr. Krishna Kumar Karwa (Member)

The Chairman of the Committee is the Non-Executive Independent Director. The Company Secretary acts as Secretary of the Committee. In case there is a request for transfer of shares, demat-remat of shares during a fortnight, the Committee meeting shall be held fortnightly else the Committee shall meet once in every quarter.

During the financial year 2011-12, the Committee had 5meetings. These meeting were held on 20th May, 2011, 1st August, 2011, 22nd October, 2011, 15th November, 2011 and 21st January, 2012. All the Members of the Committee were present at all the meetings. The Investor Grievance and Share Transfer Committee looks into the redressal of shareholder and investor complaints, issue of duplicate/consolidated share
certificates, remat /demat of shares and review of cases for refusal of transfer/ transmission and reference to statutory and regulatory authorities.

Mr. Rahul Sahasrabuddhe, the Company Secretary is designated as the Compliance Officer for complying with the requirements of the Securities Law and the Listing Agreement with the Stock Exchanges.


Details of Shareholders/Investors Complaints for the financial year 2011-12:
Number received during the year 8
Number resolved to the satisfaction of complainant 8
Number pending redressal Nil
Number pending transfers Nil