CORPORATE GOVERNANCE REPORT FOR THE YEAR 2002-03
(as required under clause 49 of the Listing Agreements with the Stock Exchanges)

  1. Company’s philosophy on Code of Governance
    The Company has always been committed to the principles of good corporate governance. It fundamentally believes that good corporate governance should be an internally driven need and is not to be looked upon as an issue of compliance dictated by statutory/regulatory requirements. The Company’s philosophy on corporate governance envisages an attainment of the highest level of transparency, accountability and equity in all facets of its operations for meeting obligations towards the shareholders and other stakeholders.

  2. Board of Directors
    The composition and category of Directors as on March 31, 2003 are as under:-
    Name of Directors Category No. of other Directorships No. of other Committees
    Public Private Member Chairman
    Ms. Pallavi Jha Chairperson and Managing Director 1 7 - -
    Ms.Kamalini Bahubali Non-executive - 1 - -
    Mr. Sanjay Jha Non-executive 1 7 - -
    Mr. M.N. Bhagwat Independent 5 - - 3
    Dr. S.C. Jha Independent 3 - 1 -

    Mr. Vivek Sekhar resigned from Directorship of the Company with effect from August 30, 2002.

    During the accounting year 2002-03, four Board Meetings were held on April 25, 2002, July 25, 2002, October 30, 2002 and January 30, 2003

    The Annual General Meeting of the Company was held on September 18, 2002.

    Attendance at Board Meeting and last Annual General Meeting:-

    Name of Directors No. of Board Meetings attended Attendance at last AGM
    Ms. Pallavi Jha 4 Present
    Ms.Kamalini Bahubali 4 Present
    Mr. Sanjay Jha 4 Present
    Mr. M.N. Bhagwat 3 Present
    Dr. S.C. Jha 3 Present

  3. Audit Committee
    The Board constituted an Audit Committee of Directors on April 26, 2001 having Mr. Sanjay Jha, Non-executive Director and Dr. S.C.Jha, Independent Director as members and Mr. M.N. Bhagwat, Independent Director as Chairman of the Committee. The members of the Committee are well versed in finance & accounts / legal matters and general business practices. The functions of the Audit Committee include the following:-

    1. Oversight 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.
    2. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other expenses.
    3. Reviewing with management the annual / half-yearly / quarterly financial statements before submission to the Board.
    4. Reviewing with management, external and internal auditors, the adequacy of the internal control systems.
    5. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading of the department, reporting structure coverage and frequency of internal audit.
    6. Discussion with external auditors before the auditors, any significant findings and follow up thereon.
    7. Reviewing the findings of any internal investigations by 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.
    8. Discussion with external auditors before the audit commences, nature and scope of audit as well as have post-audit discussion to ascertain any area of concern.
    9. Reviewing the company’s financial and risk management policies.
    10. 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.

    During the accounting year ended March 31, 2003, four Audit Committee Meetings were held on April 25, 2002, July 23, 2002, October 30, 2002 and January 30, 2003. The attendance of the Members at the Audit Committee Meetings were as follows:

    Name of Member Status No. of Meetings attended
    Mr. M.N. Bhagwat Independent Director 4
    Dr. S.C. Jha Independent Director 3
    Mr. Sanjay Jha Non – Executive Director 4

    The Statutory Auditor, Vice President (Finance) and Managing Director are invitees to the Audit Committee Meetings. The company Secretary is in attendance at these meetings

  4. Remuneration Committee
    The Board has not set up Remuneration Committee. At present Non-Executive and Independent Directors are not paid any remuneration except sitting fees for attending Board Meetings. Details of remuneration paid to Directors during the accounting year ended March 31, 2003 are as under:

    Name Of Directors Salary Rs. Contribution To P.F. and Superannuation Fund (Rs.) Perquisites Rs. Sitting FeesRs.
    Ms. Pallavi Jha 12,00,000 3,24,000 3,74,443 Nil
    Ms.Kamalini Bahubali Nil Nil Nil 16,000
    Mr. Sanjay Jha Nil Nil Nil 16,000
    Mr. M.N. Bhagwat Nil Nil Nil 12,000
    Dr. S.C.Jha Nil Nil Nil 12,000

    Note :- Except Ms. Pallavi Jha who is Chairperson and Managing Director all other directors are Non- Executive Directors.

  5. Shareholders Grievance Committee
    The Company reconstituted Shareholders Grievance Committee in July 2001 to specifically look into the redressal of the shareholders grievances and also the share transfers and other investor related matters. The Committee consists of Mr. Sanjay Jha - Chairman and Ms. Pallavi Jha - Member

    The Company Secretary, has been designated as the Compliance Officer. During the accounting year ended March 31, 2003, 213 complaints were received from shareholders. All complaints were resolved within 30 days to the satisfaction of the complainants. All valid share transfers received during the accounting year ended March 31, 2003 have been acted upon. There were no share transfers pending as on March 31, 2003, for more than 30 days.

  6. General Body Meetings
    The particulars of last three Annual General Meetings are as under:-

    Financial Year Day and Date Location Time
    1999-2000 Thursday, September 28, 2000 Walchand Hirachand Hall,Indian Merchants’ Chamber Building, IMC Marg, Churchgate, Bombay 400 020. 10.30A.M.
    2000-2001 Friday, September 28, 2001 Babasaheb Dahanukar Sabhagriha, MaharashtraChamber of Commerce and Industry, 6th Floor, Oricon House, 12, K. Dubhash Marg, Mumbai 400 001 10.30A.M.
    2001-2002 Wednesday, September 18, 2002 Babasaheb Dahanukar Sabhagriha, Maharashtra Chamber of Commerce and Industry, 6th Floor, Oricon House, 12, K. Dubhash Marg Mumbai 400 001 10.30 A.M

  7. Postal Ballot
    In order to render inter alia consultancy and operational services, educational and vocational training to individuals and Corporate entities on subjects relating to management, economic, commercial and financial and other allied services, the Company altered the object clause of its Memorandum of Association through Special Resolution passed by the shareholders by way of Postal Ballot on 26.12.2002 by complying with the prescribed procedures. Mr. Subhash Weling, Practicing Company Secretary (C.P. No. 3545) was appointed as a Scrutinizer for Postal Ballot, who conducted, supervised and controlled the entire exercise of Postal Ballot in terms of Companies (Passing of the Resolution by Postal Ballot) rules, 2001. The Special Resolution was passed by overwhelming majority as under:

    Total no. of Votes 284890 (equivalent to no. of shares)
    Total no. of valid votes cast - 163705
    Total no. of votes polled in favour 163263 (99.73% of the votes cast)
    Total no. of votes polled against 442 (00.27% of the votes cast)

  8. Disclosures

    a. The related party transactions as per Accounting Standards is set out at note no. of Schedule O in notes forming part of accounts in the Annual Report. These transactions are not likely to have any conflict with the Company’s interest.

    b. The Company has complied with the requirements of the Stock Exchanges, SEBI and Statutory Authorities on all matters related to capital markets and no penalties / strictures were imposed on the Company during the last three years.

  9. Means of Communication:

    a. The quarterly and half-yearly results of the Company are published in English and Marathi national dailies.

    b. The Company is complying with EDIFAR requirement as directed by SEBI. The shareholders can view entries by logging into the Website ‘sebiedifar.nic.in’

    c. The Management Discussion and Analysis Report forms a part of this Annual Report, which is sent to each member by post.

  10. General Shareholder Information:
  11. a) Annual General Meeting:
    Date : September 23, 2003
    Time : 11.00 A.M.
    Venue : Walchand Hirachand Hall, Indian Merchants’ Chamber Building, IMC Marg, Churchgate, Bombay 400 020.

    b) FINANCIAL CALENDER : April 2003 to March 2004.
    First Quarter Results : End July 2003.
    Half Yearly Results : End Oct 2003
    Third Quarter Results : End Jan 2004
    Yearly Results : End April 2004
    83rdAnnual General Meeting : Sept 23,2003

    c) Date of Book Closure : September 16 to September 23, 2003.

    d) Dividend payment Date : Not Applicable

    e) Listing on Stock : The Stock Exchange, Mumbai. Exchanges, Pune Stock Exchange. Listing fees for the year 2003-04 have been paid to the Stock Exchanges.

    f) Stock Code- Physical : 501370 on The Stock Exchange, Mumbai
    ISIN No. NSDL & CDSL : INE 695DO1013

    g) Market Price Data : High / Low price during each month of 2002-03 on The Stock Exchange, Mumbai and BSE Sensex are as under:

    Month Share Price on BSE BSE Sensex
    High (Rs.) Low (Rs.) High Low
    2002 April 154.00 110.00 3538.49 3296.88
    2002 May 223.00 150.00 3478.02 3097.73
    2002 June 168.00 146.65 3377.88 3148.57
    2002 July 171.00 146.65 3366.74 2932.35
    2002 August 150.00 126.00 3185.08 2931.78
    2002 September 136.00 105.00 3227.62 2973.97
    2002 October 105.00 85.05 3038.92 2828.48
    2002 November 104.00 78.20 3245.98 2928.63
    2002 December 131.00 77.00 3413.83 3186.62
    2003 January 136.00 125.00 3416.92 3199.18
    2003 February - - 3341.61 3218.37
    2003 March 136.00 136.00 3311.57 3039.83


    h) Registrar and Share Transfer Agent : In compliance with SEBI directive effective 1-4-2003, the Company has appointed for both physical & demat segments, new Registrar & Transfer Agents as under: M/s. Computech Sharecap Limited. “Computech” 147, Mahatma Gandhi Road, Fort, Mumbai – 400 023 Tel No: 22671824-25-26/ Fax No 22670380

    i) Share Transfer System : The shares lodged for transfer are processed by the Registrar and Transfer Agent and are approved by Shareholders Grievance Committee. Shares sent for transfer in physical form are registered and returned within a maximum period of 30 days from the date of receipt, subject to documents being valid and complete in all respects. Similarly all requests for demat are received and processed by the Registrar and Transfer Agents and confirmations given to the depositories within the prescribed time limit.

    Distribution of Share holding as on 31.3.2003

    NO. OF
    EQUITY SHARES HELD
    NO. OF
    SHAREHOLDERS
    % OF
    SHAREHOLDERS
    NO. OF
    SHARES HELD
    % OF
    SHAREHOLDING
    1 - 50 4633 96.50 39450 13.85
    51 - 100 101 2.10 7566 2.66
    101 - 200 36 0.75 5272 1.85
    201 - 300 7 0.15 1721 0.60
    301 - 400 10 0.21 3522 1.24
    401 - 500 3 0.06 1489 0.52
    501 - 1000 6 0.12 4216 1.48
    1001 AND ABOVE 5 0.10 221654 77.80
    TOTAL 4801 100.00 284890 100.00


    Shareholding Pattern as on 31.3.2003

    Category No. of Shares held Percentage to total (%)
    a. Promoters, Directors & Relatives 141797 49.77
    b. Mutual Fund / UTI 16100 5.65
    c. Banks, FIs & Insurance Cos. 24862 8.73
    d. Foreign Institutional Investors (FIIs) Nil Nil
    e. Domestic Companies 12054 4.23
    f. NRIs / OCBs / Pak Enemy Cases 1384 0.49
    g. Public 88693 31.13
    TOTAL 284890 100.00

    j) Dematerialisation of Shares: The shares of the Company can be held and traded in electronic form. 20.16 % (57422 no. of shares) of the Company’s share holdings have been dematerialised as on 31.3.2003.

    k) Outstanding GDRs/ ADRs / : Nil Warrants or any convertible Instrument, conversion date and likely impact on equity.

    l) Plant Location : Not Applicable. m) Address for correspondence : Walchand Capital Limited 1, Construction House, Walchand Hirachand Marg, Ballard Estate, Mumbai 400 001.