CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31ST MARCH 2015
A. COMPANY'S PHILOSOPHY
Welspun Syntex Limited believes that for a company to succeed on a sustained basis, it must maintain global standards of corporate conduct towards its employees, shareholders, consumers and society.
The primary objective is to create and adhere to a corporate culture of conscience and consciousness, transparency and openness.
B. BOARD OF DIRECTORS
(ii) Details of Date of Board Meetings:
Four meetings of the Board of Directors were held during the financial year 2014-15 i.e. 29 May 2014, 01 August 2014, 13 November 2014 and 29 January 2015.
C. COMMITTEES OF THE BOARD
The Committees constituted by the Board as on date are mentioned below
1. AUDIT COMMITTEE
The Audit Committee consists of the following 3 Independent Non-
Executive Directors as on 31 March 2015.
a. Mr. Atul Desai - Chairman
b. Mr. M. K.Tandon - Member
c. Ms. Mala Todarwal - Member (w.e.f. 01.08.2014)
d. Mr. Raj Kumar Jain - Ex-Chairman (upto 01.10.2014)
The Secretary of the Company also acts as a Secretary to the Committee.
Terms of Reference:
The terms of reference stipulated by the Board of Directors to the Audit Committee are as contained under Clause 49 of the Listing Agreement.
Four meetings of Audit Committee of Board of Directors were held on 29 May 2014, 01 August 2014, 13 November 2014 and 29 January 2015. The details of Attendance of Members of audit committee are as follows:
3. NOMINATION AND REMUNERATION COMMITTEE
In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration Committee" as the "Nomination and Remuneration Committee".
a. Nomination and Remuneration Committee of the Board of Directors of the Company consists of the following members.
1. Mr. Atul Desai - Chairman
2. Mr. M. K. Tandon - Member
3. Mr. R. R. Mandawewala - Member
4. Mr. R K Jain - Member (upto 01.10.2014)
5. Ms. Mala Todarwal - Member (w.e.f. 01.08.2014)
Four meetings of Nomination and Remuneration Committees were held on 29 May 2014, 18 June 2014, 01 August 2014 and 21 January 2015.
b. Terms of Reference
The terms of reference stipulated by the Board of Directors to the Nomination and Remuneration Committee are as contained under Clause 49 of the Listing Agreement.
Remuneration to Executive Director
To recommend payment of Remuneration of Executive Director.
c. Criteria of making payments to non-executive directors:
The Company pays sitting fees to non-executive directors for attending meetings of the Board of Directors, Audit Committee, Nomination and Remuneration Committee, Finance committee, Stakeholder Relationship Committee, Independent Directors committee, Corporate social responsibility committee etc.,.
d. Remuneration Policy Remuneration policy
Nomination and Remuneration committee (NRC) at their meeting held on 29th May 2014 approved and recommended policy relating to criteria for determining qualifications, positive attributes and independence of directors, the remuneration for the directors, key managerial personnel and other employees, formulation of criteria for evaluation of independent directors and the Board, policy on Board diversity; the Board of directors approved the said policy as recommended by NRC at its meeting held on 29th May 2014;
Nomination and remuneration policy is reproduced as under:
1. Objective of the Committee:
The Company believes that individuals associated with the Company are its most important asset and it can achieve its vision of becoming a global leader with support of directors and employees. While achieving Company's growth, the Company is committed to fulfill the aspirations of our Customers, Employees and Shareholders.
2. Constitution of Nomination and Remuneration Committee:
Nomination and Remuneration Committee shall be constituted by the Board of Directors and its members shall be selected from amongst the directors serving on the Board of Directors.
The Board may induct or remove any member of the Committee at its sole discretion.
3. Role and responsibility:
The Committee shall focus on recommending, persons who may be appointed as directors, KMP and senior management officials, to the Board of Directors. The Committee shall also scan performance of directors, KMP and senior management and recommend their removal if the performance is found unsatisfactory. The Board may mandate duties as it may deem fit from time to time
4. Identification of persons who may be appointed as directors:
The Committee shall identify persons who may be appointed as directors of the Company and recommend their appointment to the Board of Directors in this regard. While recommending appointment of any such persons as directors the Committee shall consider following aspects:
a. Business of the Company,
b. Strength, weakness, opportunity and threats to Company's business,
c. Existing composition of the Board of Directors,
d. Diversity in background of existing directors,
e. Background, skills, expertise and qualification possessed by persons being considered,
f. Specific requirements under Companies Act, 2013, standard listing agreement and any other laws as to composition of the Board.
5. Recommending appointment of Independent Directors
The Committee shall regularly review composition of the Board of Directors and recommend appointment of persons who may be qualified to be Independent Directors pursuant to provisions of section 149(6) of the companies act 2013
Apart from being 'Independent', such candidate should be eligible worthy to be appointed as directors based on criteria mentioned below:
An independent director shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the company's business.
6. Appointment of Key Managerial Personnel and senior management personnel
The Committee shall review organization structure. It shall identify persons who may be appointed as Key Managerial Personnel or as a part of senior management. While recommending appointment of any such candidate, the Committee shall consider expectations of the role of the position being considered, qualification, skill, expertise, background, human qualities such as abilities to perform as a part of a team, emotional quotient, etc.
7. Remuneration of directors, Independent Directors, KMPs, senior management personnel
The Committee shall recommend the remuneration payable to directors, Independent Directors, KMPs, senior management personnel. The Committee shall consider top industry indicators, requirements of role, qualification and experience of candidate, challenges specific to the Company and such other matters as the Committee may deem fit. The Committee shall consider that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate individuals of the quality required to run the Company successfully. The remuneration must motivate individuals to achieve benchmarks which must be aligned to the vision of the Company.
8. Evaluation of performance
The Committee shall screen and evaluate performance of Non-independent directors, Independent Directors, KMPs, senior management personnel, various committees of the Board. Evaluation of performance should provide both positive and negative aspects of performance. The Committee will suggest areas of improvement, if any. The Committee will co-ordinate the process of self-evaluation of the Board. During such process, the Committee shall review performance of the Company, deliberations at the Board meetings, impact of the decisions, etc.
The Committee may seek support of advisors from within the Company or from outside. It may seek such reasonable support as it may deem fit. The Company shall facilitate functioning of the Committee.
10.Meetings of Nomination and Remuneration committee
The Committee shall meet at least once a year. It may have additional meetings as it may require or as may be directed by the Board.
11. Evaluation Criteria
The Nomination and Remuneration committee has laid down criteria for performance evaluation of Board, its committees, independent directors, non-independent directors and Chairperson to comply provisions of Sections 134(3)(p), 149(8) and 178(2) of the Companies Act, 2013 and Clause 49(II)(B)(5) and (6) of the Listing Agreement as follows:
i. The guideline for the board evaluation policy and the process to implement it was that it should be :-
ii. Simple with ease to understand and handle the instruments to be used for this purpose;
iii. Able to meet the statutory requirements; and
iv. Having accent on improvement of the performance of the board, its committees and the directors, instead of being judgmental in nature.
v. The Nomination and Remuneration Committee of the board would formulate the criteria for the evaluation and generally oversee the process.
vi. The evaluation of individual directors would have two parts, viz., (a) quantitative data in the form of number of meetings of the board and committees attended as against the total number of such meetings held, and (b) qualitative data coming out of the process of filling in a questionnaire by the directors, which would be subjective, by its very nature.
vii. In order to induce the respondents to give their frank views, the instruments would be so designed that only ticks would be required, with no provision for description and the directors would not be required to identify themselves below the filled in questionnaire.
viii.The result of the evaluation would be discussed threadbare by the Board and remedial action taken.
ix. In case of individual directors' performance falling below a threshold, there would be a provision for individual counseling by the Chairman of the Company.
e. Meeting of Independent directors
The independent directors of the Company shall hold at least one meeting in a year without the attendance of non-independent directors and members of management. The meeting of Independent directors was held on 30 March 2015 and the following points were discussed:
- reviewed the performance of non-independent directors and the Board as a whole;
- reviewed the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;
- assessed the quality, quantity and timeliness of flow of information between the Company, management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTOR (CLAUSE 49 OF LISTING AGREEMENT)
The details of familiarization program (for independent directors) is disclosed on the Company's website and a web link thereto is <http://www.welspunsyntex.com/userfiles/file/> WSL_Familiarisation_policy.pdf
f. There are no pecuniary relationships or transactions with the non-executive directors vis-a-vis the company.
4. STAKEHOLDERS RELATIONSHIP COMMITTEE
In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement, the Board has renamed the existing "Shareholders' and Investors' Grievance Committee" as the "Stakeholders' Relationship Committee".
Stakeholders Relationship Committee of the Board of Directors of the Company consists of the following members:
a) Mr. Atul Desai - Chairman
b) Mr. B K Goenka - Member
c) Mr. R. R. Mandawewala - Member Terms of Reference:
Approval of Share Transfer deeds, transmission, transposition and issue of share certificates including duplicate, split, sub divide or consolidated and all related matters, to look into redressing of shareholders and investors complaints.
Name and designation of Compliance Officer: Mr. Kaushik N. Kapasi - Company Secretary
99.92% of the shares of the Company are in Dematerialized form.
Four meetings of Stakeholders' Relationship Committees were held i.e on 10.04.2014, 07.07.2014, 07.10.2014 and 07.01.2015.
During the year no complaints were received from shareholders.
The dematerialized shares are directly transferred to the beneficiaries by the depositories.
5. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)
In compliance with the provisions of Section 135 of the Companies Act, 2013, the Company constituted a Corporate Social Responsibility Committee comprising of three Directors.
The Committee comprises of;
Mr. Atul Desai - Chairman
Mr. B K Goenka - Member
Mr. R R Mandawewala - Member
The Company Secretary acts as the Secretary to the Committee.
b) Terms of reference of the Committee, inter alia include the following:
The Group's social vision has been enshrined in the three E's which have become the Guiding Principles of our CSR initiatives - Education, Empowerment and Environment and Health.
c) Meetings and Attendance:
During the year under review, the Corporate Social Responsibility Committee met once i.e on 29th May, 2014. All the members attended the meeting.
Disclosures on materially significant related party transactions i.e. transactions of the company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc., that may have potential conflict with the interests of the company at large.
a. Related party transactions: Please refer Note no. 34 of notes forming part of the financial statements.
The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with the Related Party Transactions pursuant to the provisions of the Companies Act, 2013 and listing agreement with the stock exchanges. The same is available on the website of the Company:
<http://www.welspunsyntex.com/userfiles/file/P0LICY%20> 0N%20THE%20TRANSACTI0NS%20WITH%20THE%20 RELATED%20PARTIES.pdf
b. Details of non - compliance by the Company, penalties, strictures imposed on the company by the Stock Exchange or SEBI or any statutory authority, on any matter related to capital market during the last 3 years: Nil
c. Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:
The Company has a Whistle Blower Policy and Vigil Mechanism for its directors and employees and no personnel have been denied access to the Audit Committee. A copy of policy is displayed on the website of the Company at URL:
Details of Compliance of the mandatory and non-mandatory clauses of this clause
i) Basis of Related Party transactions - Complied in Audit Committee meetings and Board Meetings held during the financial year.
ii) Disclosure of Accounting Treatment - Accounting standards have been followed.
iii) Board Disclosures - Risk Management - Audit committee members at their meeting held on 29th January 2015 reviewed Risk assessment policy as circulated and that each HOD has been given task of identifying risk and mitigation of risk and on completion of their task, the management shall brief the Committee.
iv) Code of Conduct - Code of Conduct as approved by the Board of Directors is posted on website of the Company at URL: <http://www.welspunsyntex.com/userfiles/file/C0DE%20> OF%20CONDUCT%20FOR%20THE%20BOARD%20OF%20 DIRECTORS%20AND%20SR.pdf
All Board Members and Senior Management Personnel have affirmed compliance with the Code on an annual basis.
v) Proceeds from public issues, right issues, and preferential issues etc - No money is raised through public issue, rights issue or preferential issues.
vi) Certification by CEO/CFO - Certificate obtained by Executive director /CFO on the Financial Statements of the Company in terms of Clause 49 of the Listing Agreement was placed before the Board, who took note of it and took the same on record.
vii) LISTING AGREEMENT COMPLIANCE:
The Company complies with all the requirements of the listing agreement entered into with the stock exchanges and the mandatory requirements of clause 49 of the listing agreement entered into with the stock exchanges.
viii) Details of adoption of the non-mandatory requirement of the Clause 49 of the Listing Agreement
The Company is in compliance with the mandatory requirement mentioned under the Clause 49(I) to 49(VIII) to the extent applicable and in addition, the Company has adopted the following Non-Mandatory requirements on Corporate Governance as recommended under clause 49 of the listing agreement entered into with the stock exchanges:
- The Company has separate individual occupying the position of Chairman and that of Executive Director.
- The Internal Auditor reports directly to the Audit Committee.
F. MEANS OF COMMUNICATION
The quarterly Un-audited financial results and yearly Audited financial results of the Company are sent to the Stock Exchange immediately after they are approved by the Board of Directors in their Board meetings.
Audited financial results for the year ended 31 March 2014 and Un-audited financial results for the quarter ended 30 June 2014, 30 September 2014 and 31 December 2014 were published in The Economic Times (E)+ (G), Ahmedabad edition.
Management Discussion and Analysis is a part of Annual Report.
G. APPOINTMENT / REAPPOINTMENT OF DIRECTORS
1. Mr. Rajesh R Mandawewala aged 53 years is a qualified Chartered Accountant. He has experience in textiles, home textiles, pipes other related business activities. He is associated with the Company as a director on the Board since 1991. He acted as an executive director/managing director of the Company with effect from 1995 to 2010. Under his guidance and direction, the Company has improved its performance consistently over a period of years.
2. Mr. B A Kale worked with M/s. Garware Nylon Ltd as All India Marketing Manager for NFY and PFY for 13 years.
He founded a professionally managed Textile Marketing Company in 1988 and achieved sustained growth for over 17 years. He is 60 years of age. He has handled Agency Business of various reknowned companies He has in depth market knowledge and excellent contacts in Textile Industry including PFY, Fabric (Knitted & Woven), Garment Exporters, Home Textiles & Dyes. He is a Science Graduate from Bombay University, Post Graduate-Diploma in Textile and Marketing Management and passed D.A.M from Bombay University.
He is Executive director from 30th October 2010 and under his leadership the company has progressed as evident from the financial results of last 6 years.
3. Mr. K. H. Viswanathan, aged 53 years old is B. Com, A.I.C.W.A. He is a Management Consultant for the last 18 years, having over 29 years' of experience in the field of Tax and Legal advisory and structuring, Management and Due - diligence audits, Business Strategy, Mergers and Acquisitions etc.
4. Mr. Abhishek R. Mandawewala, aged 28 years is B.A./M.Eng (Honours.) in Manufacturing Engineering from University of Cambridge. He was executive director of RMG Alloy Steel Limited from 4th September 2010 to 28th March 2013. He subsequently joined Welspun India Limited as a President (Advance Textile) with effect from 1st April 2013
H. GENERAL SHAREHOLDERS INFORMATION
a. 32nd Annual General Meeting Venue - Survey No. 394(P), Village Saily, Silvassa, U. T. of Dadra & Nagar Haveli)
Time - 11.00 a.m.
Day and Date - Wednesday, 23.09.2015
Financial year - From 01 April 2014 to 31 March 2015
b. Date of Book Closure - Tuesday, 15.09.2015 To Friday, 18.09.2015 (Both days inclusive)
c. Dividend payment date - within five days from the date of declaration of accumulated dividend on preference shares subject to approval of Banks.
d. Board Meetings for Quarterly Unaudited Financial results: (Tentative and subject to change)
I Qtr Results (Apr - Jun) Upto August 14, 2015
II Qtr Results (Jul - Sep) Upto November 14, 2015
III Qtr Results (Oct - Dec) Upto February 14, 2016
IV Audited Results (15-16)(Jan-Mar) Upto May 30, 2016
e. Listing on Stock Exchanges and Stock Codes:
The Company's securities are listed on Bombay Stock Exchange Limited, Mumbai, P. J. Tower, Dalal Street, Fort, Mumbai and Stock Code No. is 508933.
I. REGISTRAR AND SHARE TRANSFER AGENT:
Link Intime India Private Limited
Address: C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (W), Mumbai- 400 078.
Tel. No.: 022 - 25946970,Fax No.: 022 - 25926969,
SHARE TRANSFER SYSTEM
Shares sent for transfer in physical form are registered by the Company's Registrars and Share Transfer Agents within 15 days from the date of receipt of documents, if the same are found in order. Shares under objection are returned within two weeks.
L. DEMATERIALISATION OF SHARES AND LIQUIDITY
The Shares of the Company are fully dematerialized under the category of compulsory delivery in dematerialized mode by all categories of investors.
M. LOCATION OF PLANT
Registered Office : Survey No. 394(P), Village Saily, Silvassa, (U.T. of Dadra & Nagar Haveli);
Palghar Plant : Plot no. 8 to 15, I & J, Dewan Industrial Estate,Palghar, Maharashtra;
Address forcorrespondence : 9th Floor, Trade world, “B” Wing, Kamala MillsCompound, Senapati Bapat Marg, LowerParel, Mumbai – 400 013;
Telephone No : 022 – 66136000
Fax No. : 022 – 24908020
E-mail id : firstname.lastname@example.org
Website : www.welspunsyntex.com