DIRECTOR CORPORATE GOVERNANCE REPORT FOR THE YEAR 2004-05
(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, 2005 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 2 - -
    Ms.Kamalini Bahubali Non-executive - 1 - -
    Mr. Sanjay Jha Non-executive - 2 - -
    Mr. M.N. Bhagwat Independent Non-executive 6 - - 3
    Dr. S.C. Jha Independent Non-executive 1 - 1 -
    *Mr. Shailesh Haribhakti Independent Non-executive 16 1 4 5

    During the accounting year 2004-05, four Board Meetings were held on April 29, 2004, July 22, 2004, October 29, 2004 and January 27, 2005

    The Annual General Meeting of the Company was held on September 28, 2004.

    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 4 Present
    Dr. S.C. Jha 2 Absent
    Mr. Shailesh Haribhakti 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, Non-Executive Independent Director as members and Mr. M.N. Bhagwat, Non-Executive Independent Director as Chairman of the Committee. With effect from April 19, 2004, Mr. Shailesh Haribhakti, Non-Executive Independent Director was also appointed as Member of the Audit 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:-

    a. 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.

    b. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other expenses.

    c. Reviewing with management the annual / half-yearly / quarterly financial statements before submission to the Board.

    d. Reviewing with management, external and internal auditors, the adequacy of the internal control systems.

    e. 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.

    f. Discussion with external auditors before the audit, any significant findings and follow up thereon.

    g. 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.

    h. 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.

    i. Reviewing the company’s financial and risk management policies.

    j. 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, 2005, four Audit Committee Meetings were held on April 29th 2004, July 22nd, 2004, October 29th, 2004 and January 27th, 2005. 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 Non Executive Director 4
    Dr. S.C. Jha Independent Non Executive Director 2
    Mr. Sanjay Jha Non – Executive Director 4
    Mr. Shailesh Haribhakti Independent Non – Executive Director 3


    The Statutory Auditors, Associate Vice President (Accounts & Finance) and Managing Director are invitees to the Audit Committee Meetings.

  4. Remuneration Committee
    The Board constituted Remuneration Committee of Directors on April 29 2004 having Mr. M.N. Bhagwat, Non-executive Independent Director and Shailesh Haribhakti, Non-executive Independent Director as Members and Dr. S. C. Jha, Non-executive Independent Director as Chairman of the Committee. The broad terms of the Committee are to determine and review remuneration / compensation package of Managing Director / Whole Time Director of the Company. 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, 2005 are as under:

    Name Of Directors Salary Rs. ContributionTo P.F. and Superannuation Fund (Rs.) Perquisites Rs. Sitting Fees Rs.
    Ms. Pallavi Jha 12,00,000 3,49,080 3,00,000 Nil
    Ms. Kamalini Bahubali Nil Nil Nil 16,000
    Mr. Sanjay Jha Nil Nil Nil 16,000
    Mr. M.N. Bhagwat Nil Nil Nil 16,000
    Dr. S.C.Jha Nil Nil Nil 8,000
    Mr. Shailesh Haribhakti 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. Mr. Sadanand Marathe, Associate Vice President (Accounts & Finance) has been designated as the Compliance Officer.

    During the accounting year ended March 31, 2005, no complaints which were received from shareholders remained unresolved. All valid share transfers received during the accounting year ended March 31, 2005 have been acted upon. There were no share transfers pending as on March 31, 2005, 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
    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.
    2002-2003 Tuesday September 23. 2003 Walchand Hirachand Hall, Indian Merchant Chambers., IMC Marg, Churchgate, Mumbai – 400 020 11.00 A.M
    2003-2004 Tuesday September 28. 2004 Walchand Hirachand Hall, Indian Merchant Chambers., IMC Marg, Churchgate, Mumbai – 400 020 11.30 A.M.

    Whether any Special Resolution was passed in the previous three AGMs? Yes.

  7. Disclosures

    a. The related party transactions as per Accounting Standard 18 is set out at note no. 5 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.

  8. 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.

  9. General Shareholder Information

    a) Annual General Meeting :
    Date: December 27, 2005
    Time : 10.30.A. M.
    Venue : Walchand Hirachand Hall, Indian Merchants’ Chamber, IMC Marg, Churchgate, Mumbai – 400 020

    b) FINANCIAL CALENDER :
    Financial Reporting for
    - Quarter ending June 30th 2005 : By end July 2005
    - Quarter/Half year ending Sept. 30th 2005: By end October 2005
    - Quarter ending December 31st 2005 By end January 2005
    - Quarter/Year ending March 31st 2006 : By end April 2006

    c) Date of Book Closure : December 19, 2005 to December 27, 2005

    d) Dividend payment Date : Not Applicable

    e) Listing on Stock Exchange : The Stock Exchange, Mumbai. Listing fee for the year 2005-06 has been paid to the Stock Exchange.

    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 2004-05 on The Stock Exchange, Mumbai and BSE Sensex are as under:

    Month Share Price on BSE BSE Sensex
    High (Rs.) Low (Rs.) High Low
    2004 April 263.50 204.00 5,979 5,599
    2004 May 250.00 182.00 5,772 4,227
    2004 June 200.00 140.05 5,012 4,613
    2004 July 245.00 144.05 5,201 4,723
    2004 August 250.00 138.50 5,269 5,022
    2004 September 185.30 150.00 5,638 5,179
    2004 October 200.95 161.10 5,804 5,558
    2004 November 346.00 162.00 6,248 5,649
    2004 December 340.45 255.00 6,617 6,176
    2005 January 324.00 220.00 6,696 6,069
    2005 February 430.00 230.10 6,721 6,508
    2005 March 382.95 287.80 6,955 6,321

    h) Registrar and Share Transfer Agent : For both physical & demat segments: M/s. Computech Sharecap Limited. “Computech” 147, Mahatma Gandhi Road, Fort, Mumbai – 400 023 Tel No: 22671824-25-26 Fax No.: 22670380 Email helpdesk@computechsharecap.com

    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 31.3.2005

    NO. OF EQUITY SHARES HELD NO. OF
    SHAREHOLDERS
    % OF
    SHAREHOLDERS
    NO. OF
    SHARES HELD
    % OF
    SHAREHOLDING
    1 - 50 4827 93.87% 45102 15.84%
    51 - 100 182 3.54% 14433 5.07%
    101 - 200 68 1.32% 9677 3.40%
    201 - 300 16 0.31% 3970 1.39%
    301 - 400 15 0.29% 5249 1.84%
    401 - 500 10 0.19% 4649 1.63%
    501 - 1000 14 0.27% 9212 3.23%
    1001 AND ABOVE 11 0.21% 192598 67.60 %
    TOTAL 5143 100.00% 284890 100.00%

    Shareholding Pattern as on 31.3.2005

    Category No. of Shares held Percentage to total (%)
    a. Promoters, Directors & Relatives 141797 49.77
    b. Mutual Funds / UTI 11013 3.87
    c. Banks, FIs & Insurance Cos. 6176 2.17
    d. Foreign Institutional Investors (FIIs) Nil Nil
    e. Domestic Companies 14468 5.08
    f. NRIs/OCBs/Pak Enemy Cases 1387 0.49
    g. Public 110049 38.62
    Total 284890 100.00

    j) Dematerialisation of Shares : The shares of the Company can be held and traded in electronic form 73.26 % (208723 no. of shares) of the Company’s share holdings have been dematerialised as on 31.3.2005

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

    l) Plant Location : Not Applicable.

    m) Address for Correspondence : Walchand Capital Limited 1, Construction House Walchand Hirachand Marg, Ballard Estate, Mumbai – 400 001 Tel : 2268095, 22702870 Fax : 22610574 Email : walchand@bom3.vsnl.net.in