REPORT ON CORPORATE GOVERNANCE
(Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges)
1. Corporate Philosophy
The Company is committed to good Corporate Governance. It makes best efforts for and monitors, full compliance with the requirements of Corporate Governance under the revised Clause 49 of the Listing Agreement with the Stock Exchange. There is a conscious endeavour to bring about transparency in operations and for maintaining professional approach and accountability so that the return to the shareholders is optimized. Regular meetings of the Board and Committee/s thereof are held for transparency in management, effective leadership and for supervision and control. Risk management and internal control functions are monitored on a regular basis and are geared up to meet the progressive governance standards.
2. Board of Directors
The composition of the Board of Directors, as at 31st March 2014, is five, two Promoter Directors (out of which 1 is executive and other non-executive) and three Non-executive independent Directors. The Agenda and other documents alongwith relevant information on the business to be discussed and decided in the Board/Committee Meeting/s are circulated well in advance. The Managing Director is responsible for the conduct of the business as also the day-to-day affairs of the Company. A Certificate of Statutory Compliance of the various rules and regulations, laws & clauses applicable to the Company is placed before the Board at every Meeting on a quarterly basis. The Statutory Auditors are special invitee/s to the Board/ Committee Meeting/s as and when required, and particularly at the time of Annual & Quarterly Financial Statements.
Brief Profile of the Directors:
Shri Chaman Lal Jain, aged 70 years (D.O.B 08.09.1944) is a promoter director and designated as Chairman & Managing Director of the Company since 01.10.1988. He is B.Com and has about 46 years of rich experience in Textile Industry. Work experience inter-alia includes the Setting up of the existing textile business and makes it possible for an upward surge in its business activities, turnover / exports and profitability over the years and efficiently manages day-to-day monitoring and exercise effective control over the affairs of the Company, helps to achieve its targets. Shri Jain has taken several initiatives to focus on growth, value addition and cost effectiveness besides overseeing the Company's business. He has successfully and in a sustained way, contributed significantly towards improvement and growth of the Company. He is holding 16,89,818 Equity Shares of Rs.5/- each which constitute 15.65% of the Equity Share Capital of the Company.
Shri Hari Bansal, aged 39 years (D.O.B 14.09.1975) is a promoter director of the Company since 12.11.2002 and presently is holding the position of Director in the Company. He is B.Chem. (Engineering) and has about 13 years of rich experience in Textile Industry. Work experience inter-alia includes the expertise knowledge of domestic and export industry pertaining to textile business. He is holding 9,96,118 Equity Shares of Rs.5/- each which constitute 9.23% of the Equity Share Capital of the Company.
Shri V.B. Aggarwal, aged 77 years (D.O.B 12.05.1937) is an independent non executive director of the Company since 28.06.2004. He is B.Com(H), FICWA, ACS and has about 43 years of rich experience of varied Industries. He has an expertise knowledge in Finance, Cost Accounting and Audit & Management. He does not hold any Equity Share in the Company.
Dr. B. K. Behera, aged 55 years (D.O.B 17.04.1959) is an independent non executive director of the Company since 28.06.2004. He is Ph.D, M. Tech. and has about 28 years of rich experience of Textile Industries and latest textile technology. He does not hold any Equity Share in the Company.
Mr. Sukh Raj Sharma, aged 76 years (D.O.B 01.01.1938) is a Grad.(Econ.), Punjab University, Fellow Member of the Institute of Company Secretaries of India and is also a Fellow Member of the Institute of Cost & Management Accountant. He is having 42 years of vast experience in the field of Finance, Accounts and Secretarial. His last Assignment was as a Director (Finance) with the Central Electricity Authority, Ministry of Power, Government of India before taking VRS in 1995. Presently he is practicing as a Company Secretary in Whole-time Practice.
None of the non-executive independent Directors hold any shares in the company, either in their own name or in the name of their relatives/associates, or hold shares in any other company exceeding 2% of the share capital of that company.
Shri C.L. Jain, and Shri Hari Bansal are related to each other (as Father-Son relationship), except them none of the other Director of the Company is related with other.
Directors resigned during the year.
There is no change in the Directorship/s of the Company during the year under report.
3. Committee/s of the Board A. Audit Committee
An Audit Committee is duly constituted in terms of Section 292A of the Companies Act 1956 and in compliance with the requirements of Clause 49 of the Listing Agreement. Shri V.B. Aggarwal, a non-Executive Independent Director, is the Chairman of the Audit Committee. Dr. B.K. Behera, Non-Executive Director and Shri C.L. Jain, Managing Director are the other members of this Committee.
Shri V.B. Aggarwal is a professionally qualified Cost Accountant & Company Secretary, and has the requisite financial acumen and a rich & varied expertise on financial matters. He attended and was present at the Annual General Meeting of the Members held on September 30, 2013.
The Committee relies on the expertise and knowledge of the management, the Statutory Auditors, and the Professionals in carrying out its oversight responsibilities, and for effectively looking after all the financial and other matters specified u/s 292A of the Act ibid. The Committee discharges such duties and functions indicated in Clause 49 of the Listing Agreement with the Stock Exchange and such other functions as may be specifically delegated to the Committee by the Board from time to time. The Auditors are permanent invitee/s to the meeting/s of the Committee, especially at the time of consideration of Quarterly and Annual Accounts.
Four Meetings of the Audit Committee were held on May 23, August 10, October 30, 2013 and February 10, 2014 during the financial year ended 31st March, 2014. All the members of the Audit Committee attended each and every meeting held during the year except Dr. B.K. Behera, who did not attended the meeting held on May 23, 2013.
The Company has a "Whistle Blower Policy". Every employee has a right of access to the Audit Committee and its Members, without any information to their Superiors. The Company hereby affirms that it has not denied any personnel access to the Audit Committee of the Company and has provided protection to whistle blowers from any unfair termination and other unfair or prejudicial employment practices.
B. Remuneration Committee
The Remuneration Committee of the Company comprises of three non-executive independent Directors namely Shri V.B. Aggarwal, Shri S.R. Sharma & Dr. B.K. Behera and Shri C.L. Jain, Mg. Director, as its members. The Remuneration Committee is empowered to review the remuneration of the Managing Director and Executive Directors. No meeting of the Selection Committee was convened during 2013-14.
C. Selection Committee
The Selection Committee of the Company also comprises of two non-executive independent Directors namely Shri V.B. Aggarwal and Dr. B.K. Behera, and Shri C.L. Jain, Mg. Director, as its Members. The Selection Committee functions for regulating the selection and appointment of any relative/s of a Director, to hold office or place of profit in the Company. No meeting of the Selection Committee was convened during 2013-14.
D. Committee of Directors (COD)
In terms of the revised clause 41 of the Listing Agreement, a Committee of Directors (COD) has been constituted with Shri V.B. Aggarwal, non- executive independent Director as its Chairman, and Shri C. L. Jain, Mg. Director as its Member, for the purpose of considering the Limited Review Report of the Statutory Auditors, before its submission to the Stock Exchange. No meeting of the Committee of Directors was required to be held during the financial year ended March 31, 2014.
E (i) Investor Grievance cum Share Transfer Committee
The Investor Grievance cum Share Transfer Committee has been constituted under the Chairmanship of Dr. B.K. Behera. The other members of the Committee are S/Shri V.B. Aggarwal, C.L. Jain and Hari Bansal. The terms of reference to the Committee inter-alia includes the redressal of Shareholders/Investors grievances, de-materialisation/ re-materialisation of Shares, to consider the status of Quarterly Complaints received and redressed. Apart from these a general authority has been given to Shri C.L. Jain, Chairman & Mg. Director of the Company to approve the Share Transfer, Transmission, Transposition and other related matters.
Four Meetings of the Investor Grievance cum Share Transfer Committee were held on May 23, August 10, October 30, 2013 and February 10, 2014 during the financial year ended 31st March, 2014. All the members of the Committee attended each and every meeting held during the year except Dr. B.K. Behera and Shri V.B. Aggarwal who did not attended even a single meeting.
During the year under review, Shri C.L. Jain in his independent capacity and as per the authority delegated to him has approved the Share Transfer/Transmission/issue of duplicate Share Certificate/s & other related matters, upto 2500 Equity Shares per case, held in physical form. Proceedings of all the Share Transfers/ Transmissions/ other matters approved are placed at the ensuing Board Meeting/s, from time to time.
Shri Atul Jain, Compliance Officer & Manager (Finance) acts as the Compliance Officer of the Committee. The Company attends the Shareholders'/investors' communications/grievances expeditiously. No Demat request was pending at the close of the last Financial Year.
4. Remuneration to Directors
The Mg. Director & the Whole-time Directors are paid remuneration as decided & approved by the Remuneration Committee, the Board and the Shareholders, & thereafter, the approval of the Central Govt. is obtained wherever required. The Company does not have any Stock Option Scheme.
The appointment of the Mg. Director & the Whole-time Directors is generally for a period of 5 years or as approved by the Board, and the Central Govt. if required, which can be terminated by giving one month Notice on either side. No severance fee is payable. There are no retirement benefits, but only provision for Leave Encashment and Gratuity to which the Mg. Director & other Whole-time Director/s are entitled at the end of their tenure or as per the rules of the Company.
5. SUBSIDIARY COMPANY:
The Company has a wholly-owned non-listed Subsidiary Company. The Chairman is the ex-officio Chairman of the Subsidiary Company. The Audit Committee reviews the financial statements of the Subsidiary, which are placed before the Audit Committee at its meetings, on quarterly basis. Such Financial Statements are also placed before, and reviewed by the Board of Directors of the Company.
There were no transactions of a materially significant nature with the Promoters, the Directors or the Management, their subsidiaries or relatives that may have potential conflict with the interest of the Company at large, other than transactions with related party as disclosed in the Financial Statements.
The Company has complied with the requirements of the Stock Exchange, SEBI and other statutory authorities on all matters related to Capital Markets during last three years. There were no penalties imposed nor any strictures passed on the Company by the Stock Exchange, SEBI or any other Statutory Authority relating to the above.
Certificate/s of Compliance signed by the Compliance Officer &/or the Authorised Signatory for the provisions of all applicable laws are regularly being placed before the Board of Directors, which are taken on record in the Board Meeting/s on a quarterly basis.
7. Means of Communication Financial Results:
The Quarterly, Half Yearly and Annual Financial Results were faxed and sent by speed post to the Bombay Stock Exchange Ltd. on the prescribed format immediately after the conclusion of the Board Meeting at which the results were taken on record. The Results were published in the Pioneer (English) & Hari Bhoomi (Hindi), newspapers.
The Management Discussion and Analysis Report for the year ended 31st March, 2014 forms part of this Annual Report.
8. General Shareholder Information:
A. Annual General Meeting :
Date and Time : Monday, September 30, 2014 at 9.00 A.M.
Venue : Community Hall, Block-7, Trilok Puri, Near Bal Vikas Vidyalaya Delhi-110091
Financial Calendar* :
a) 1st Quarter Results - By the mid of Aug '14.
b) 2nd Quarter Results - By the mid of Nov.,'14.
c) 3rd Quarter Results - By the mid of Feb., '15.
d) 4th Quarter Results - By the mid of May., '15.
*Tentative and subject to change.
Date of Book Closure :
26.09.2014 to 30.09.2014 (both days inclusive)
B. Listing on Stock Exchange :
Bombay Stock Exchange Ltd., Dalal Street, Mumbai- 400 001.
D. Registrar & Transfer Agents:
M/s. Beetal Financial & Computer Services (P) Ltd.,
Beetal House, 3rd Floor, 99, Madangir, Behind Local Shopping Centre Near Dada Harsukh Das Mandir, New Delhi-110 062
Phone : 29961281-82 Fax : 29961284
E. Investors' queries/requests for transfer, transmission, issue of duplicate share certificates, etc. may be sent either to the Regd Office of the Company at 23, Eastern Avenue, Maharani Bagh, New Delhi-110 065, or to the Registrar & Transfer Agents, M/s. Beetal Financial & Computer Services (P) Ltd. at the address given above. No Investor queries/ complaints/ grievance was pending for a period of 30 days or more as at 31st March, 2014.
F. Share Transfer System:
The Shares of the Company are in compulsory demat mode. Hence, most of the transfers are executed electronically. However, a few cases of transfer/transmission are received by the company/registrar in physical mode. The Mg. Director as per the authority delegated by the Board approves all share transfers in physical mode upto 2500 shares per transfer. There has been no instance of share transfers beyond 2500 shares in physical mode, however, if there is any case, such transfers are approved by the Share Transfer Committee/ Board of Directors who meet periodically, and as and when required.
9. Dematerialisation of Equity Shares
The Equity Shares of the Company are in compulsory demat mode. Out of the total number of 1,07,96,574 Equity Shares of Rs. 5 each, 93.47% i.e. 1,00,91,968 No. of Equity Shares are held in demat form as on 31.03.2014, as against 93.38 % i.e. 1,00,81,698 Equity Shares as on 31.03. 2013.
10. There are no GDRs/ADRs/Warrants or any convertible instruments in the Company.
11. Locations of the Plant, and address of the Regd. Office/ Corporate Office:
a. Registered & Corporate Office :
23, Eastern Avenue, Maharani Bagh, New Delhi-110065. b.Works & Corporate Office : A-106, Sector-IV, Noida - 201 301 (U.P.)
12. The Company has not declared any dividends in the last three financial years and the amounts outstanding as unpaid dividend as on 31st March, 2014 is Nil.
13. Compliance Officer and Contact Address
Shri Atul Jain Finance Manager Addi Industries Limited
Corp. Off.: A-106, Sector-IV, Noida - 201 301 (U.P.)
Tel : 95120-2529336 Fax: 95120-2529334
14. COMPLIANCE WITH NON-MANDATORY REQUIREMENTS:
The status of compliance in respect of non-mandatory requirements of Clause 49 of the Listing Agreement is as follows:
The Company does not have a Non-Executive Chairman on its Board. Independent Directors are porposed to be appointed for a period of 5 Years w.e.f. April1, 2014, subject to the approval of the Shareholders.
Details are given under the heading "Remuneration Committee".
Shareholders Rights: T
he half yearly financial results including any significant events in the last six months were published in the newspapers pursuant to Clause 41 of the listing agreement.
During the year under review, there was no qualification on the Company's financial statements for the period ended March 31, 2014.
Training of Board Members:
The Directors interact with the management in a very free and open manner on information that may be required by them.
Mechanism for evaluation on non-executive Board Members:
The performance evaluation of non-executive member is done by the Board annually based on criteria of attendance and contributions at Board/Committee meetings, as also role played/ contributions other than at meetings.
Whistle Blower Mechanism:
The Audit Committee had framed a Whistle-Blower Policy, which provides a formal mechanism for all employees of the Company to approach the Management and/ or Audit Committee, and make protective disclosures to the management about unethical behaviour, actual or suspected fraud. The Whistle-Blower Policy requires every employee to promptly report to the Management any possible violation that could affect the business or reputation of the Company. No employee of the Company has been denied access to the Audit Committee.