Composition Of Board Committees:

The Company has an optimum combination of Executive and Non-Executive Directors in its Board and comprises of seven Directors, each having expertise in their field of operation including one Woman Director. The total number of Non-Executive 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, and there is optimum combination of more that one third of board as independent directors as per clause 49 of the Listing Agreement with the Stock Exchanges.

No Director is, inter se, related to any other Director on the Board, except Mr. Krishna Kumar Karwa and Mr. S. K. Saboo who are related to each other and Mr. Prakash Kacholia and Ms. Preeti Kacholia who are related to each other. None of the Directors is a Director in more than 20 public companies and member of more than 10 committees or acts as Chairman of more than 5 committees across all companies in which he/she is a Director. (For the purpose of reckoning the limit under this para, Chairmanship / Membership of the Audit Committee and the Stakeholders’ Relationship Committee alone have been considered as specified in Clause 49 of the Listing Agreement).

The Composition of the Board, Directorship/Committee positions in other companies as on 31st March, 2015 and number of Meetings held and attended during the year is as follows:
Name of the Directors Category Board Meetings during Financial Year 2014-15 Attendance at last AGM held on 13.08.2014 Other Directorships Other Committee positions
Held Attended Private Company Public Company Chairman Member
Mr. G. P. Gupta NED (I) 4 2 No 1 4 1 6
Mr. S. K. Saboo NED 4 4 Yes - 1 - -
Mr. R. K. Krishnamurthi NED (I) 4 4 Yes - 4 1 1
Mr. G. C. Vasudeo NED (I) 4 4 Yes - 2 1 1
Mr. Krishna Kumar Karwa ED 4 4 Yes 2 4 - 4
Mr. Prakash Kacholia ED 4 4 Yes 1 3 - -
Ms. Preeti Kacholia NED 4 N.A. N.A. - - - -
(Appointed w.e.f. 30.03.2015 as woman director)
Note: Category: NED – Non-executive Director, NED (I) – Non-executive Director and Independent, ED–Executive Director & Promoter

INDEPENDENT DIRECTORS


Considering the requirement of skill sets on the Board, eminent people having an independent standing in their respective field/profession, and who can effectively contribute to the Company’s business and policy decisions are considered by the Nomination, Remuneration and Compensation Committee, for appointment, as Independent Directors on the Board. The Committee, inter alia, considers qualification, positive attributes, area of expertise and number of Directorships and Memberships held in various committees of other companies by such persons. The Board considers the Committee’s recommendation, and takes appropriate decision. Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under law.The Non-Executive Directors, including Independent Directors on the Board, possess requisite experience and specialization in diverse fields such as legal, finance, banking, administration etc.
Company has issued a letter of appointment to independent directors which also covers the code for independent directors as per schedule IV as provided in the Companies Act, 2013 and the Company has disclosed the terms and conditions of appointment of Independent Director on the website of the Company . Company has also informed to the BSE Limited and National Stock Exchange of India Limited regarding appointment of Independent Directors. Company has also received a declaration from them in the manner as provided in the Companies Act, 2013.

A sample of the letter of appointment is available on the website of the Company and can be accessed through the following link :www.emkayglobal.com/investorrelations.

Familiarization Programme


Your Company has put in place a structured induction and familiarization programme for all its Directors including the Independent Directors. The Company through such programme familiarizes not only the Independent Directors but any new appointee on the Board, with a brief background of the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model, operations of the Company, etc. They are also informed of the important policies of the Company including the Code of Conduct for Board Members and Senior Management Personnel and the Code of Conduct to Regulate, Monitor and Report,Trading by Insiders, etc.

The familiarization programme for Independent Directors in terms of provisions of Clause 49 of the Listing Agreement is uploaded on the website of the Company and can be accessed through the following link: www.emkayglobal.com/investorrelations/disclosures.

Evaluation of Board Effectiveness

In terms of provisions of the Companies Act, 2013 read with Rules issued there under and Clause 49 of the Listing Agreement, the Board of Directors, on recommendation of the Nomination,Remuneration and compensation Committee, have evaluated the effectiveness of the Board. Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the financial year ended 31st March, 2015. The evaluation of the Directors was based on various aspects which, inter alia, included the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company along with the effectiveness of their contribution.

Meetings of Independent Directors

In accordance with the provisions of Schedule IV (Code for Independent Directors) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a meeting of the Independent Directors of the Company was held on 23rd January 2015, without the attendance of Non-Independent Directors and members of the management
Board Meetings:
During the Financial Year 2014-2015, 4 board meetings were held on 22nd May, 2014, 13th August, 2014, 31st October, 2014 and 23rd January, 2015.The gap between any two Meetings did not exceed one hundred twenty days.
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 Meetings. All material information is incorporated in the agenda for facilitating meaningful and focused discussions at the meetings. Wherever 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, both the Managing Directors appraise the Board at every meeting on the overall performance of the Company, followed by a 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 discussed in the meeting of the Board are(However the list mentioned below is only indicative and not exhaustive):
  • The minutes of the Board meeting of unlisted Subsidiary Companies.
  • Minutes of the meetings of Audit Committee and other Committees of the Board.
  • Declaration of Independent Directors at the time of appointment/annually and every year.
  • Annual operating plans of various businesses,budgets and any updates on the same.
  • Statement of all significant transactions, related party transactions and arrangements with the Subsidiary Companies.
  • Quarterly Results of the Company on Standalone & Consolidated basis.
  • Annual Financial Results of the Company, Auditor's Report and the Report of the Board of Directors.
  • Dividend declaration, if any.
  • 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 minutes of the proceedings of each Board and Committee Meeting are duly recorded. A draft of the minutes is circulated to all the members of the Board/Board Committee for their comments.

AUDIT COMMITTEE

A. Qualified and Independent Committee. 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 Vice President Accounts & Finance are permanent invitees to the Meetings. Mr. Vaibhav Purohit, Company Secretary, acted as the Secretary of the various Committee of the Board of Directors.

Meetings

During the Financial Year 20114-15, four Meetings were held on 22nd May, 2014, 13th August, 2014, 31st October, 2014 and 23rd January, 2015. The gap between any two Meetings did not exceed one hundred twenty days. The attendance of each Committee member was as under:

Name No of Meetings Attended
Mr. G. C. Vasudeo 2
Mr. G. P. Gupta 4
Mr. R. K. Krishnamurthi 4
Mr. Prakash Kacholia 4

Terms of Reference

The terms of reference of Audit Committee are described below:

  • Overseeing of 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 Auditors 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 Directors’ Responsibility Statement, to be included in the Board’s report in terms of provisions of the Companies Act, 2013.
    • Changes, if any, in accounting policies and practices and reasons for the same.
    • Major accounting entries involving estimates based on the exercise of judgment by management.
    • Significant adjustments 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 transactions.
    • 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 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 nonpayment of declared dividends) and creditors.
  • To review the functioning of the Whistle Blower/Vigil mechanism, in case the same exists.
  • 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 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 & background, etc. of the candidate.
  • Review and monitor the auditor’s independence and performance, and effectiveness of audit process;
  • Approval or any subsequent modification of transactions of the company with related parties;
  • Scrutiny of inter-corporate loans and investments;
  • Valuation of undertakings or assets of the company, wherever it is necessary;
  • Evaluation of internal financial controls and risk management systems;
  • 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 Committee also reviews the following matters:
    • Management 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.

NOMINATION, REMUNERATION AND COMPENSATION COMMITTEE

The nomenclature of the “Remuneration /Compensation Committee” was changed to “Nomination, Remuneration and Compensation " at the Board Meeting held on 22.05.2014. As per the clause 49 (IV) of the Listing agreement, Chairman of the Board shall not chair the Nomination, Remuneration and Compensation Committee. Hence during the year, Mr. G. C. Vasudeo, being Independent Director, has been appointed as a Chairman of the Committee in place of Mr. G. P. Gupta and Mr Gupta will continue as a member of the said committee

The present composition of the Nomination, Remuneration and Compensation Committee is as follows:

Mr. G. C. VasudeoChairman
Mr. S. K. SabooMember
Mr. R. K. KrishnamurthiMember
Mr. G. P. GuptaMember

The Committee comprises of only Non-Executive Directors as its members. All the members of the committee are Independent except Mr. S. K. Saboo.

Meetings

During the Financial Year 2014-15, One Meetings was held on 31st October, 2014. The attendance of each Committee member was as under:

NameNo. of Meetings attended
Mr. G. P. Gupta 1
Mr. G. C. Vasudeo1
Mr. R. K. Krishnamurthi1
Mr. S.K.Saboo1

Terms of Reference

The Nomination, Remuneration and Compensation Committee determines the company’s 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 as under.

  1. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
  2. Formulation of criteria for evaluation of Independent Directors and the Board;
  3. Devising a policy on Board diversity;
  4. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

The Chairman of the Nomination, Remuneration and Compensation Committee remains present at the Annual General Meeting, to answer the shareholders' queries. However, it would be up to the Chairman to decide who should answer the queries.

The Nomination, Remuneration and Compensation Committee also meets 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 includes implementation, administration and superintendence of the ESOP Scheme formulated by the Company from time to time and to formulate 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 by an employee 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
  • Frame any other byelaws, rules or procedures as it may deem fit for administering ESOP.

Remuneration Policy

The Remuneration policy of your Company is a comprehensive policy which is competitive, in consonance with the industry practices and rewards good performance of the employees of the Company. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance against set objectives

The Board of Directors and Nomination, Remuneration and 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 Nomination, Remuneration and Compensation Committee and the Shareholders. The remuneration structure comprises of salary, perquisites, retirement benefits and performance linked bonus. No stock options are granted to the executive directors of the Company.

Remuneration to Non- Executive / Independent Director:

The remuneration / commission is fixed as per the slabs and conditions mentioned in the Companies Act, 2013. Commission to Non Executive Independent Directors may be paid within the monetary limit approved by shareholders, subject to the limit of 1% of the profits of the Company computed as per the applicable provisions of the Act.

The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed per meeting of the Board or Committee as may be prescribed in the Companies Act, 2013 and also subject to approval of the Board of Directors and Members.

Sitting fees for Board /Committees paid to all non executive directors including Independent Directors fixed by the Board of Directors was within the limit as prescribed in the Companies Act, 2013.An Independent Director is not entitled to any stock option of the Company.

Details of Remuneration paid to Managing Director(s) for the Financial Year 2014-15

On the basis of the recommendation of the Remuneration/Compensation Committee and the Board of Directors of the Company at their meeting held on 18th May, 2013 and the Members of the Company at their meeting held on 5th August, 2013 approved re-appointment and payment of remuneration to Mr. Krishna Kumar Karwa-Managing Director & CFO and Mr. Prakash Kacholia-Managing Director for a period of three years with effect from 1st October, 2013 subject to approval of the Central Government due to inadequacy of profits.

Ministry of Corporate Affairs had approved their reappointment and payment of Remuneration of Rs. 84,00,000/- per annum to Mr. Prakash Kacholia and Mr. Krishna Kumar Karwa each vide their approval letter dated 27th February, 2014 as against Rs1,57,08,000/- per annum each, approved by the Members of the Company on 5th August, 2013.

In view of the deteriorated business environment in the past few months and financial position of the Company, both the Managing Directors of the Company expressed their desire to accept a salary of Rs. 60,00,000/- p.a. w.e.f. 1st October, 2013. The Basic Salary may be reinstated whenever the Board and /or Nomination, Remuneration and Compensation Committee feels it appropriate and fit after considering the business environment from the new financial year starting 1st April, 2015. Remuneration paid to Managing Directors for the Financial Year 2014-2015.

Particulars Mr. Krishna Kumar Karwa (Managing Director & CFO) (Amt in Rs.) Mr. Prakash Kacholia (Managing Director) (Amt in Rs.)
Salary53,57,1453,57,148
Companies Contribution to Provident Fund6,42,8526,42,852
Total60,00,00060,00,000

The Non Executive Directors were paid remuneration by way of Sitting Fees as under:

Details of Remuneration paid by way of Sitting Fees to Non-Executive Directors during the Financial Year 2014-2015

NameSitting Fees for Board/Committee Meetings attended (Amt in Rs.)
Mr. G. P. Gupta50,000
Mr. S. K. Saboo50,000
Mr. R. K. Krishnamurthi90,000
Mr. G. C. Vasudeo90,000
Ms. Preeti KacholiaNIL
Total2,80,000

STAKEHOLDERS RELATIONSHIP COMMITTEE

During the year, the nomenclature of the “Investor Grievance and Share Transfer Committee” was changed to “Stakeholders Relationship Committee” pursuant to section 178 of the Companies Act, 2013. The present composition of the Stakeholders Relationship Committee of the Company is as follows:

Mr. R. K. KrishnamurthiChairman
Mr. Prakash KacholiaMember
Mr. Krishna Kumar KarwaMember

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 is held fortnightly else the Committee meets once in every quarter.

During the financial year 2014-15, the Committee had 4 meetings. These meeting were held on 22nd May, 2014, 13th August, 2014, 31st October, 2014 and 23rd January, 2015. All the Members of the Committee were present at all the meetings. The Stakeholders Relationship Committee looks into the redressal of shareholder and investor grievances, 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 Vaibhav Purohit,Company Secretary & Compliance Officer appointed by the Company has been 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 2014-15

Number received during the year7
Number resolved to the satisfaction of complainant7
Number pending redressalNil
Number pending transfersNil