KHAITAN ELECTRICALS LIMITED

CORPORATE GOVERNANCE REPORT

1.

Companys Philosophy on Code of Governance:

Your Company believes that good corporate governance entails the balancing of
corporate actions with the interests of all stakeholders and satisfying the tests of
accountability, transparency and fair play.

2.

Board of Directors:
The strength of your Companys Board is ten directors comprising five non-executive
directors, out of whom four are independent directors, viz., Sri O.Swaminatha Reddy, Sri
M.G.Todi, Sri Ajay Kumar Kajaria, Sri Jyoti P. Tibrewala and Sri. S.K.Khaitan, nonexecutive Chairman of the Board. The Five Executive Directors include Sri Sunil
K.Khaitan, Vice Chairman & Managing Director, Sri Sajjan Dabriwal, Dy.Managing
Director, Sri R.A.Lohariwala, Executive Director, Sri G.R.Choudhary, Finance Director
& Secretary and Sri P.S.Prabhakar, Executive Director.
Six Board meetings were held during the period from 1st April , 2007 to March 31, 2008
on the following dates:
June 29th, 2007; July 31st 2007; October 31st, 2007; November 29th, 2007; January
30th, 2008, and February 28th, 2008.
The attendance at Board Meetings and at the Last Annual General Meeting and the
No.of Other Directorships and Committee Memberships/Chairmanships of Directors is
given below:
Name of Directors

No. of
Board
Meetings
Attended

Attendance
at
Last AGM
(Yes/No)

Sri S.K.Khaitan
Sri O.Swaminatha Reddy
Sri M.G.Todi
Sri A.K.Kajaria
Sri Jyoti P.Tibrewala
Sri Sunil K.Khaitan
Sri Sajjan Dabriwal
Sri R.A.Lohariwala
Sri G.R.Choudhary
Sri P.S.Prabhakar

2
4
2
2
3
2
5
2
5

Yes
Yes
No
No
Yes
No
Yes
No
No
Yes

Number of
Directorships
in other
Public
Limited
Companies
5
11
5
4
2
2
2
1
2
1

Committee
Memberships
in other Public Limited
Companies (excluding
Khaitan Electricals
Ltd.)
5
6
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil

KHAITAN ELECTRICALS LIMITED

3.

Disclosure Regarding Appointment Or Reappointment Of Directors:

Given below are the abbreviated resumes of the Directors of Khaitan Electricals Ltd.
seeking re-appointment:
Sri S.K. Khaitan (67years) is the Chairman and Promoter of the Company. He is
a Commerce Graduate and having over three decades of experience in running
industry and business. His other Directorships in other Public Limited Companies
include Khaitan (India) Limited, Khaitan Lefin Ltd., Murlidhar Ratanlal Exports
Ltd., Emami Paper Mills Ltd. and Rupa & Co. Ltd. His Shareholdings in the
Company: 126209 Nos.
Sri Sunil K. Khaitan (48Years) is the Vice-Chairman and Managing Director of
the Company. He is a Post Graduate in MBA having 29 Years experience in the
Fan Industry. He is associated with the Company for over two and a half decades
after joining the Board of the Company in January, 1979. His other Directorships
in other Public Limited Companies include Khaitan (India) Ltd. and Khaitan Lefin
Ltd., His Shareholdings in the Company: 59060 Nos.
* Sri R.A. Lohariwala (58 Years) is the Executive Director of the Company. He
is a Commerce Graduate (Hons) and LLB. He has been associated with the
group for about 25 Years and has got wide experience in fan industry, particularly
in production, marketing and commercial areas. His other Director Ships in other
Public Limited Companies include The Oriental Mercantile Co. Ltd. He holds no
share in the Company.

Sri G.R. Choudhary ( 50 Years ) is the Finance Director and Secretary of the
Company. He is a Chartered Accountant and Company Secretary. He is
associated with the group for about 21 Years and has got varied experience in the
fields of Finance, Secretarial, Accountancy and Taxation matters. His other
Directorships in other Public Limited Companies include Khaitan Lefin Ltd. and
Naturewealth Development Corporation Ltd . His Shareholdings in the Company:
2 Nos.

4.

Audit Committee:
Your Company has an Audit Committee comprising four Non Executive and Independent
Directors (viz.,Sri O.Swaminatha Reddy, Sri Jyoti P. Tibrewala, Sri A.K.Kajaria and Sri
M.G.Todi). Sri O.Swaminatha Reddy is the Chairman of the Committee. Sri
P.S.Prabhakar, Executive Director is the Secretary of the Committee.
The terms of reference of the Audit Committee cover the matters specified under Clause
49 of the Listing Agreement as well as in Section 292A of the Companies Act, 1956.
During the period under review, the Audit Committee held Three Meetings on June, 29th,
2007; October 31st, 2007; January 30, 2008.
The attendance at the Audit Committee Meetings is given below:
Name of Director
Sri O.Swaminatha Reddy
Sri Jyoti P. Tibrewala
Sri A.K.Kajaria
Sri M.G.Todi

5(a).

No. of
Meetings Attended
1
1
2
2

Directors Remuneration Committee

Directors Remuneration Committee was formed on May 8th, 2004. The Committee has
been constituted to recommend/review the remuneration package of the Vice-Chairman /
Whole-time Directors. During the year, the committee met once on June 29th, 2007 in
which all the members were present.

Members

Sri M.G.Todi (Chairman of the Committee)

Sri S.K.Khaitan
Sri A.K.Kajaria

Meeting Attended

1
1
1

ROLE OF COMMITTEE:- Determining and monitoring of the Companys policy and specific
remuneration packages including pension rights and any compensation payment for Whole-time
Directors.

5(b).

Remuneration of Directors:
The details of remuneration of the Directors during the period under review are as follows:
Name of the Directors

Salary and CommiPerquisites ssion

(Rs.)
(Rs.)
Sri S.K.Khaitan
--Sri O.Swaminatha Reddy
--Sri Jyoti P.Tibrewala
--Sri M.G.Todi
--Sri A.K.Kajaria
--Sri Sunil K.Khaitan
3,509,378 3000000
Sri Sajjan Dabriwal

1,121,871

800000

Sri R.A.Lohariwala

1,058,600

400000

Sri G.R.Choudhary

1,056,920

400000

961,382

400000

Sri P.S.Prabhakar

6.

Sitting
Total
Period of appointment
fees
& (Notice Period)
(Rs.)
(Rs.)
15,000
15,000
-25,000
25,000
-30,000
30,000
-25,000
25,000
-25,000
25,000
--6,509,378 01.11.03 to 31.10.08
(Three Months)
-1,921,871 20.09.07 to 19.09.10
(Three Months)
-1,458,600 01.10.07 to 30.09.10
(Three Months)
-1,456,920 01.10.07 to 30.09.10
(Three Months)
-13,61,382 27.09.07 to 26.09.10
(Three Months)

Share Transfer Committee and Shareholders/Investors Grievances Committee:

Your Company has a Share Transfer Committee comprising Sri S.K.Khaitan, Sri Sunil
K.Khaitan, Sri Jyoti P. Tibrewala, Sri Sajjan Dabriwal , Sri G.R.Choudhary and Sri
P.S.Prabhakar.
The Committee met 24 times during the period under review.
All shares received for transfer were registered and dispatched within 30 days of receipt,
if the documents were correct and valid in all respects.
Your Company received 392 Nos. of Transfers/Transmission applications during the year
and the above applications were duly transferred and dispatched subsequently within the
stipulated period and no transfers are pending as on date. Your Company received 1169
Nos. of Dmat applications during the year and the said Dmat applications were duly
confirmed within the stipulated period and no Dmat cases are pending as on date.
Your Company also has a Shareholders/Investors Grievance Committee to review the
Shareholders and Investors Grievances.
The Committee met Twice on October 18, 2007 and March 31st, 2008 during the period
under review.
The Committee is Chaired by Sri Jyoti P.Tibrewala, a Non-executive Independent
Director. The other members of the Committee are Sri Sajjan Dabriwal, Deputy
Managing Director and Sri P.S.Prabhakar, Executive Director. Sri P.S.Prabhakar,
Executive Director is the Secretary of the Committee. Sri P.S.Prabhakar is presently the
Compliance Officer and the Secretary of the Share Transfer Committee as well as the
Shareholders/Investors Grievance Committee.
Your Company received 29 Nos. of Complaints from Shareholders relating to the non
receipt of dividend, Exchange of Certificates, Bonus Shares, Annual Report, Shares
sent for transfers, and Dmat credit etc., The complaints were duly attended to and there
were no complaints pending for more than 30 days as on March 31, 2008.

7.

General Body Meeting:

AGM
31ST

FINANCIAL
YEAR
2006-07

30th

2005-06

29th

2004-05

LOCATION

DATE

TIME

Federation of A.P. Chambers

and Commerce of Industry,
Hyderabad 500 004
Federation of A.P. Chambers
and Commerce of Industry,
Hyderabad 500 004.
Federation of A.P. Chambers
and Commerce of Industry,
Hyderabad 500 004

25th September, 11.00 A.M

2007
26th September, 11.00 A.M
2006
15th September, 11.00 A.M
2005

Special Resolution transacted at the Last Three Annual General Meetings held on:
SEPTEMBER 25th, 2007
No Special Resolution was passed at the 31st Annual General Meeting held on
September 25th , 2007
SEPTEMBER 26th, 2006
No Special Resolution was passed at the 30th Annual General Meeting held on
September 26th, 2006.

SEPTEMBER 15th, 2005

No Special Resolution was passed at the 29th Annual General Meeting held on
September, 15th, 2005.
All resolutions as set out in respective notices were duly passed by the shareholders.
No. Resolution requiring postal ballot has been placed for shareholders approval at the
ensuing Annual General Meeting.
8.

Disclosures:
There were no transactions of material nature between the Company and its directors or
Management and their relatives or promoters that may have a potential conflict with the
interest of the Company. The Register of Contracts, containing transactions in which
directors are interested is placed before the Board regularly.

There have been no instances of non-compliance by the Company on any matters related
to capital markets and hence the question of penalties or strictures being imposed on the
Company by the Stock Exchange or SEBI or Statutory authority does not arise.

9.

Means of communications:
The annual, half-yearly and quarterly results are regularly submitted to Stock Exchanges
in accordance with the Listing Agreement and normally published in the Business
Standard and Andhra Bhoomi.

During the year the Company has not made any presentation to institutional investors or
analysts.
The Management Discussion and Analysis Report form a part of Directors Report.

10.

General Shareholders Information:

a.

b.

Annual General Meeting:

Date and time
Venue

16th September, 2008 at 11.00 A.M..

The Federation of A.P.Chambers of
Commerce and Industry (FAPCCI)
Premises Surana Udyog Hall
Federation House,11-6-841,Red Hills
HYDERABAD- 500 004

Financial Calendar (tentative)

-

1st quarter
2nd quarter/half-yearly
3rd quarter
Audited results

4th week of July, 2008

4th week of Oct, 2008
4th week of Jan. 2009
4th week of June,2009.
01st September, 2008 to
16th September, 2008

c.

Dates of Book closure

d.

Dividend payment in

October, 2008

e.

Stock Exchanges where listed and

Stock Code

1.

The Stock Exchange, Mumbai

Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai 400 001
(Stock Code : 504269)

2.

National Stock Exchange of India Ltd.

Exchange Plaza, 5th Floor, Plot No.C/1.
G Block, Bandra Kurla Complex,
Bandra (East), Mumbai 400 051.
(Stock code : Khaitan Ele. EQ

Note:- Delisting Application Still Pending with CSE from December, 2004.
The listing fee for the year 2007-08 has been paid to BSE & NSE.
f.

ISIN allotted to Equity Shares

INE 761A01019

g.

Market Price Data:

BSE
HIGH
LOW
CLOSE
MONTHLY
VULUME
(RS.INLACS)

h.

APR.
155.65
105.00
142.20
1145.26

MAY
154.00
125.00
147.50
462.41

JUN.
150.70
131.00
143.10
226.64

JUL.
155.00
129.15
137.80
804.92

AUG.
148.00
121.60
134.00
348.17

SEP.
136.00
117.00
121.40
233.73

OCT.
130.00
110.65
115.55
159.21

NOV.
175.00
111.00
128.85
460.34

DEC. JAN.
145.00 144.00
120.00 79.40
139.65 95.40
302.46 243.03

FEB.
104.00
52.25
73.20
1218.61

MAR.
79.00
46.60
61.45
276.49

Stock Performance Index

150

21000
20500
20000
19500
19000
18500
18000
17500
17000
16500
16000
15500
15000
14500
14000
13500
13000

140

120
110
100
90
80
70

.....KEL

i.

'0
8
AR
M

'0
8
FE
B

JA
N
'0

'0
7
EC
D

O
V'

07

07
T'
O
C

07
SE
P'

G
'0
AU

JU
L'
0

N
'0
7
JU

07
AY
'
M

'0
7

60

AP
R

KEL PRICES(Rs.)

130

BSE SENSEX

Comparision Chart : 2007-08

-----SENSEX

Depository Registrar & Share Transfer Agents:

M/s. CIL Securities Ltd.,

214 Raghava Ratna Towers
Chirag Ali Lane
Abids, HYDERABAD 500 001
Phone Nos. 040-23202465/23203155
Fax No. 040-66661267

j. Distribution of Shareholdings as on 31st March, 2008

Shares held
Upto 500
501 To 1000
1001 To 2000
2001 To 3000
3001 To 4000
4001 To 5000
5001 To 10000
10001 and above
Physical mode
Electronic Mode

No of
Shareholders
21431
392
133
33
16
12
30
59
22106
14789
7317

% of
Shareholders
96.95
1.77
0.60
0.15
0.07
0.05
0.14
0.27
100.00
66.90
33.10

No of Shares Held
2013136
277732
187933
85981
55554
56147
214509
8609008
11500000
3311197
8188803

% of Shares
Holding
17.51
2.42
1.63
0.75
0.48
0.49
1.86
74.86
100.00
28.80
71.20

k. Shareholding Pattern as on 31st March, 2008

Categories

No. of Shares

Promoters Holdings
Mutual Funds
Banks, Financial Institutions & Others
Private Corporate Bodies
Indian Public
NRI/OCBS

4479061
26493
399606
2901290
3688675
4875

38.95
00.23
03.48
25.23
32.07
00.04

11500000

100.00

TOTAL

l. Outstanding Equity Share Warrants

2,00,000 Nos Equity Share Warrants Outstanding as on 31.03.2008 .( 10,00,000
Equity Share Warrants allotted to Promoters on 14th December, 2006, out of the above
8,00,000 Nos Warrants Converted into Equity Shares @ Rs.10/-each at a premium of
Rs.121/- per Share on 12th March, 2008 ). These Warrants having not been converted
within 18 Months(i.e up to 13th June, 2008) as per SEBI DIP Guidelines, stand lapsed.
m.

Plant Location

Plot No.129, S.V.Co-op.Industrial Estate,

IDA, Bollaram, 502 320 Medak Dist.
P-10 Transport Depot Road
Kolkata - 700 088.
Plot No.14, Sector 6
Faridabad 121 006 (Haryana)
Unit : Shree Shyam Industries
1-Gondpur Industrial Area
Dist Sirmor, Paonta Sahib (Himachal Pradesh)

n.

Address for Correspondence :

Shareholders correspondence should be
addressed to Companys Share Transfer Agents at the address given in (i) above.
In case of any difficulty, Shareholders may contact Sri A.V.S.G.Krishna
Murthy, Senior Officer, Secretarial at the Companys Secretarial Department at
A-13, Co-operative Industrial Estate, Balanagar, Hyderabad 500 037, Telephone
Nos : 23770640/01/02/03 or by email at hydfactory@khaitan.com /
hydcommercial@khaitan.com or by fax :040-2377 0646

o.

CEO Declaration on Code of Conduct

Reproduced is the text of the declaration made by the Vice Chairman and
Managing Director confirming compliance of Code of Conduct by all Directors
and Senior Management Personnel:
This is to confirm that the Company has adopted a code of conduct for its
employees and all Board Members. This code is available on the Companys
Website.
I Confirm that the Company has in respect of the financial year ended March 31,
2008 received from the Senior Management Personnel and the Board Members, a
declaration of compliance with the Code of Conduct.

Kolkata
June 30, 2008

Sunil K. Khaitan
Vice Chairman & M.D

KHAITAN ELECTRICALS LIMITED

AUDITORS CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF

CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENTS
To the Members of Khaitan Electricals Limited
1. We have reviewed the implementation of Corporate Governance procedures by Khaitan
Electricals Limited during the period ended 31st March, 2008, with the relevant records and
documents maintained by the Company, furnished to us for our review and the report on
Corporate Governance as approved by the Board of Directors.

2. The compliance of conditions of corporate governance is the responsibility of the

management. Our examination was limited to procedures and implementation thereof,
adopted by the Company for ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of
the Company.
3. On the basis of our review and according to the information and explanations given to us, the
conditions of Corporate Governance as stipulated in Clause 49 of the listing agreements with
the Stock Exchanges have been complied with in all material respect by the Company.
4. As required by the Guidance Note issued by the Institute of Chartered Accountants of India,
we have to state that there are no investors grievances unattended for a period exceeding one
month against the Company as per the records maintained by the Company.

For V.S.RAO & CO.

Chartered Accountants

Kolkata
30th June, 2008

V S RAO
Partner
Membership No.4748

For G.P.AGRAWAL & CO.

Chartered Accountants

SUNITA KEDIA
Partner
Membership No.60162

CERTIFI CATE
(Under clause 49 of Listing Agreement for Corporate Governance)
To
The Board of Directors
Khaitan Electricals Ltd.
Hyderabad.
Sirs,
a) We have reviewed financial statements and the cash flow statement for the year and that to the
best of our knowledge and belief :
i.
ii.

These statements do not contain any materially untrue statement or omit any material
fact or contain statements that might be misleading;
These statements together present a true and fair view of the companys affairs and are
in compliance with existing accounting standards, applicable laws and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the
company during the year which are fraudulent, illegal or violative of the companys code of
conduct.
c) We accept responsibility for establishing and maintaining internal controls for financial reporting
and that we have evaluated the effectiveness of internal control systems of the company
pertaining to financial reporting and we have disclosed to the auditors and Audit Committee.
There are no deficiencies in the design or operation of such internal controls.
d) We have indicated to the auditors and the Audit committee
i.
ii.
iii.

There are no significant changes in internal control over financial reporting during the
year;
There are no significant changes in accounting policies during the year.
There are no instances of significant fraud of which we have become aware and the
involvement therein, if any, of the management or an employee having a significant role
in the companys internal control system over financial reporting.

Sunil K Khaitan
V.C & M.D
KOLKATA
30th June, 2008

G R Choudhary
Finance Director