REPORT ON CORPORATE GOVERNANCE
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
01. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:
The Company's Corporate Governance Policy aims at ensuring transparency, accountability and integrity in all its operations and in its relations with all the stakeholders (Investors, Customers, Employees, Suppliers and Government) with a view to increasing value for all of them.
02. BOARD OF DIRECTORS:
The Board of Directors of your Company has the necessary combination of Executive and Non-executive Directors in order to have a balanced Board Structure. As on March 31, 2016, the strength of the Board of Directors is seven Directors comprising of six non-executive Directors including one woman Director and one Managing Director. Out of total number of directors, four are Independent Directors who constitute more than one-half of the total strength of the Board. The Company is in compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) in respect of Corporate Governance.
b) Meetings of the Board of Directors:
During the financial year 2015-16, 6 (six) meetings of the Board of Directors of your Company were held on April 17, 2015, May 22, 2015, August 6, 2015, November 6, 2015, February 12, 2016 and March 28, 2016.
c) Directors Attendance Record and Directorships held:
None of the Directors on the Board is a member of more than ten committees and Chairman of more than five committees across all the Public - Companies in which they are Directors.
d) Code of Conduct:
Your Company's Board of Directors has prescribed a Code of Conduct for all Board Members and the Company's Senior Management. The Code of Conduct is available on your Company's website www.cardindia.com
All the Board Members and the Senior Management personnel of your Company have affirmed their compliance with the Code of Conduct for the year ended March 31, 2016. The Managing Director and the Chief Financial Officer has issued a certificate on the financial statements and other matters of the Company for the financial year ended
March 31, 2016 (enclosed as Attachment – I to this Corporate Governance Report) which also includes a declaration confirming that all the Board members and senior management personnel have affirmed compliance with the code of conduct of the Company and that they have not come across any instance of non-compliance of the Code during the year ended March 31, 2016.
03. AUDIT COMMITTEE:
a) Brief Description and Terms of Reference:
The Audit Committee of the Company has been constituted in line with the provisions of Regulation 18 of the Listing Regulations read with Section 177 of the Companies Act, 2013.
Terms of reference of the Audit Committee in brief are as stated below:
? Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
? Recommending to the Board the appointment, re-appointment and if required, the replacement or removal of the statutory auditors and the fixation of audit fees, and confirm their independence.
? Approval of payment to statutory auditors for any other services rendered, if authorised by the Board.
? Review with the management, the quarterly financial statements before submission to the Board for approval and secure certificate from CFO in terms of Regulation 17(8) of the Listing regulations.
? Evaluate internal financial controls and risk management systems.
? Review with the management, performance of statutory and internal auditors and adequacy of the internal control systems.
? Any other terms of reference as may be included from time to time in the Listing Regulations.
b) Composition and attendance at Audit Committee Meeting:
The Audit Committee comprises of three members and all of whom are Independent Directors.
During the year under review four meetings of the Audit Committee were held, viz., May 22, 2015, August 6, 2015, November 6, 2015 and February 12, 2016.
The Company Secretary acts as the Secretary of the Committee.
04. NOMINATION & REMUNERATION COMMITTEE:
a) Brief Description and Terms of Reference:
The Nomination & Remuneration Committee looks after the due diligence and recommendation process for appointment/re-appointment of Directors, evaluation of performance of Directors and remuneration to MD & CEO and other Key Managerial Personnel of the Company and monitoring of the Nomination & Remuneration Policy of the Company.
The brief terms of reference of the Nomination and Remuneration Committee are as follows:
? formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;
? formulation of criteria for evaluation of performance of independent directors and the board of directors;
? devising a policy on diversity of board of directors;
? identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the board of directors their appointment and removal; and
? whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
b) Composition and attendance at Nomination & Remuneration Committee Meeting:
The Nomination & Remuneration Committee comprises of three members and all are Independent Directors.
During the year under review two meetings of the Nomination & Remuneration Committee were held, viz, May 22, 2015 and February 12, 2016.
c) Nomination & Remuneration Policy:
The Board of Directors of the Company has adopted a Nomination & Remuneration Policy of in terms of the provisions of the Companies Act, 2013 and the Listing Regulations with the stock exchanges and in order to harmonize the aspirations of human resources consistent with the goals of the Company which interalia includes Company's policy on Board Diversity, selection, appointment and remuneration of directors, criteria for determining qualifications, positive attributes, independence of a director and criteria for performance evaluation of the Directors.
d) Remuneration to Directors:
The Company pays remuneration by way of salary, perquisites, allowances and commission to its Managing Director.
The remuneration paid to the Managing Director is within the ceiling prescribed under the provision of the Companies Act, 2013 and Schedule V attached thereto.
All Non-Executive Directors of the Company receive sitting fees for each meeting of Board and Committee thereof attended by them. Pursuant to approval of the Shareholders accorded in the Annual General Meeting held on August 1, 2013, the net profits of the Company, not exceeding 1%, are distributable as commission, amongst the Non-Executive Directors considering the special services and efforts rendered by them and their attendance of the Board Meetings. Other than sitting fees, no other remuneration is paid to the Non-Executive Directors during the financial year.
None of the Directors has any pecuniary relationships or transactions with the Company except by way of remuneration paid to the Managing Director and sitting fees and Commission paid to other Non-Executive Directors.
Your Company presently does not have performance linked incentives for its Directors. No severance fee is payable. The Managing Director is paid Bonus as may be approved by the Board of Directors, within the overall limits approved by the members of the Company.
The tenure of office of the Managing Director can be terminated by the Company or the Managing Director by giving, the other, three months prior notice of termination in writing.
05. STAKEHOLDERS' RELATIONSHIP COMMITTEE:
a) Brief Description and Terms of Reference:
The brief terms of reference of the Stakeholders Relationship Committee are as follows:
? To look into and redress shareholders/investors grievances relating to transfer of shares ;
? To appoint Compliance Officer for redressal of investor grievances and ?x his responsibilities;
? Non-receipt of declared dividends, non-receipt of Annual Reports;
? All such complaints directly concerning the shareholders/investors as stakeholders of the Company; and
? any such matters that may be considered necessary in relation to shareholders and investors of the Company.
b) Composition and attendance at the Stakeholders' Relationship Committee:
The Stakeholders' Relationship Committee comprises of three members and two of them are Independent Directors.
During the year under review five meetings of the Stakeholders' Relationship Committee were held, viz, on May 22, 2015, August 6, 2015, November 6, 2015, February 12, 2016 and March 28, 2016.
Mr. Amogh Barve, Manager (Legal) & Company Secretary of the Company is Compliance Officer of the Company.
The Company received no Complaints during the year. There were no pending share transfers and complaints as on March 31, 2016.
06. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
a) Brief Description and Terms of Reference:
The roles and responsibilities of the Committee are brie?y stated below:
? Formulate and recommend to the Board, a CSR policy;
? Recommend the amount of expenditure incurred on the activities as mentioned in schedule VII of the Act;&
? Monitor the CSR policy from time to time
b) Composition and attendance at Corporate Social Responsibility Committee Meeting:
The Board has constituted a Corporate Social Responsibility (CSR) Committee consisting of the following members:
Mr. Mehul Trivedi Chairman (Non-Independent Non-Executive Director)
Mr. Prashant Trivedi Member (Managing Director)
Mr. Sudhir Merchant Member (Independent Director)
The CSR Committee did not meet during the year. Considering the threshold requirements specified under section 135 (1) of the Companies Act, 2013, the Company was not liable for CSR spend as specified under section 135 (5) of the Companies Act, 2013 for the financial year 2015-16 and has not spent any amount on CSR activities.
It is proposed to develop and adopt the CSR Policy in respect of CSR initiatives of the Company when the Company will qualify for CSR spend.
07. RISK MANAGEMENT COMMITTEE:
a) Brief Description and Terms of Reference:
Terms of reference of the Risk Management Committee are as given below in brief:
? Ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management;
? To establish a framework for the company's risk management process and to ensure its implementation;
? To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices; and
? To assure business growth with financial stability.
b) Composition and attendance at Risk Management Committee Meeting:
The Board of Directors constituted Risk Management Committee consisting of directors and non-director as its members.
During the year under review, three meetings of the Risk Management Committee were held, viz, August 5, 2015, November 6, 2015 and February 6, 2016.
Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the constitution of Risk Management Committee is mandatory for only the top 100 listed Companies. The Company had, however, voluntarily formed Risk Management Committee to ensure that adequate systems and processes for Risk Management are implemented in the Company. The Company has a two tier structure consisting of Risk Steering Committee and Risk Council to monitor and mitigate the risks of the Company. After satisfying itself about the adequacy of systems and processes implemented in the Company for Risk Management, the Board of Directors of the Company dissolved the Risk Management Committee.
08. INVESTMENT COMMITTEE:
a) Brief Description and Terms of Reference:
The Investment Committee is authorized to investment of surplus funds of the Company in shares, debentures, bonds and other recognized securities of companies listed on the Stock Exchanges in India, in government securities, bonds issued by public sector companies/corporations or in units issued by recognized mutual funds for cash in one or more tranches upto an aggregate amount not exceeding Rs. 75 Crores in a single security or in multiple securities
b) Composition and attendance at Investment Committee:
The Investment Committee comprises of three members out of which two are Independent Directors.
During the year under review, four meetings of the Investment Committee were held, viz, April 17, 2015, September 30, 2015, October 21, 2015 and November 6, 2015.
09. MEETING OF INDEPENDENT DIRECTORS:
A separate meeting of Independent Directors of the Company as per the requirements of Schedule IV of the Companies Act, 2013 and regulation 25(3) of the Listing Regulations was held on February 18, 2016 without the attendance of Non-Independent Directors and the members of the management, interalia, to discuss the following:
? Review the performance of Non independent Directors and the Board of Directors as a whole;
? Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors.
? Assess the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties
All the independent Directors were present at the meeting.
10. PERFORMANCE EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 read with Regulation 4 (2) (f) (ii) (9) and Regulation 17 (10) of the Listing Regulations, the Performance Evaluation of the Directors, the Board and its Committees was carried out based on the criteria/manner approved by the Nomination & Remuneration Committee and approved by the Board of Directors. The criteria/manner for evaluation as approved by the Nomination & Remuneration Committee and approved by the Board is as stated below:
THE INDIAN CARD CLOTHING COMPANY LIMITED
A) Criteria/Manner of Performance Evaluation of the Board:
? Composition and quality of the Board
? Key responsibilities and functions of the Board
? Delegation of authorities to the Committees
? Effectiveness of the Board Processes and functioning
? Board Culture
? Relationship of the Board Members with the Management and other Stakeholders
B) Criteria/Manner of Performance Evaluation of the Committees:
? Composition and quality of the Committee
? Key responsibilities and functions of the Committee
? Effectiveness of the Committee Processes and functioning
? Relationship of the Committee Members with the Management and other Stakeholders
C) Criteria/Manner of Performance Evaluation of Individual Directors:
? Number of Meetings of the Board and Committees attended by the Director.
? Contributions made by the Director at the Meetings of the Board and of the Committees.
? Performance Characteristics of the Director such as acting in good faith, exercising reasonable care, skill and diligence, Independent Judgment and avoiding conflict of interest situation.
? Relationship of the Director with the Management and other Stakeholders.
? In case of evaluation of a director who is a Managing Director/Executive Director, consideration should also be given to the factors like achievement of budget targets, ef?cacy in leading the Management Team, Cost reduction initiatives implemented and effectively ensuring Governance and Compliance requirements.
? In case of a director who is a Chairperson, consideration should be given to the factors like demonstration of effective leadership on the Board, role played as a direct link between the Board and the Management and effectiveness in conducting the meetings ensuring constructive discussions before deciding on any proposals.
11. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
Pursuant to provisions of Regulation 25(7) of the Listing Regulations, the Company prepared and pursued the
Familiarization Programme for Independent Directors as hosted on Company's website at
During the year under review, Mrs. Sangeeta S. Pandit, who was appointed as Independent Director at the 61st Annual General Meeting, was afforded a plant visit and was briefed about the operations of the Company.
12. ADDITIONAL INFORMATION REQUIRED UNDER REGULATION 36 OF THE LISTING REGULATIONS:
Additional information as required under regulation 36 (3) of the Listing Regulations in respect of directors seeking appointment/re-appointment is provided as Attachment – II to the notice convening 62nd Annual General Meeting.
a) Materially Significant Related Party Transactions:
All related party transactions forms part of the Note No. 37 to the Financial Statements. Saving those, there were no materially significant related party transactions with Company's promoters, directors or its management, their subsidiaries or relatives, etc. that had a potential confiict with the interest of the Company. The register of contracts containing transactions, in which Directors are interested, is placed before the Board regularly. The RPT Policy is placed on the Company's website at http://www.cardindia.com/content/fr_investors.htm
b) Accounting Treatment:
No treatment different from that prescribed in an Accounting Standards has been followed by the Company.
c) Non-compliance of any requirement of Corporate Governance Report of sub-paras (2) to (10) of Para C to Schedule V of the Listing Regulations:
The Company has complied with all the requirements in this regard, to the extent applicable
d) Policy for determining material subsidiaries:
The Company has disclosed the policy for determining material subsidiaries as per the requirement of Regulation 46(2) (h) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on its website: http://www.cardindia.com/content/pdf/Policy on Material Subsidiaries.pdf
e) Commodity Price Risk or Foreign Exchange Risk and Commodity Hedging Activities:
Disclosure with respect to Commodity Price Risk or Foreign Exchange Risk and Commodity Hedging Activities is not applicable.
f) Statutory Compliance, Strictures and Penalties:
The Company has complied with rules and regulations prescribed by the Stock Exchanges, Securities and Exchange Board of India and any other statutory authority relating to capital market.
No penalties and/or strictures have been imposed on the Company by any Stock Exchange or SEBI or any statutory authority during the last three years.
Your Company has complied with all the mandatory requirements of Listing Regulations specified under Regulation 17 to 27 to the extent applicable and clauses (b) to (i) of the sub-regulation (2) of regulation 46 of the Listing Regulations.
g) Share Capital Audit:
? Pursuant to Regulation 55(A) of the SEBI (Depositories and Participants) Regulations, 1996, with the Stock Exchanges, certificates, on half-yearly basis, have been issued by Vivek Divekar & Co., Company Secretaries-in-Practice for due compliance of share transfer formalities by the Company.
? Vivek Divekar & Co., Company Secretaries-in-Practice carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited and Central Depository Services (India) Limited ("Depositories") and the total issued and listed capital. The audit confirms that the total issued/paid-up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with Depositories).
h) Vigil Mechanism:
The Company has established a vigil mechanism and oversees through the committee, the genuine concerns expressed by the employees and other Directors. The Company has provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided the complainant direct access to the Chairman of the Audit Committee. The Vigil Mechanism Policy of the Company is placed on Company's website i.e., http://www.cardindia.com/content/fr_abus.htm
I) CEO / CFO Certification:
A compliance certificate from the Managing Director and the Chief Financial Of?cer, on the Financial Statements and other matters of the Company for the financialyear ended March 31, 2016 is provided as Attachment – I to this Corporate Governance Report.
14. MEANS OF COMMUNICATION:
The Company's corporate website www.cardindia.com consists of Investor Relations section, which provides comprehensive information to the Shareholders.
Quarterly and Annual Financial results are published in one of the renowned English and Marathi dailies, viz.
Indian Express and Loksatta respectively. The said results are also made available on Company's website, www.cardindia.com. There is hardly any official news required to be released on website or even in Press.
The Company's Shareholding Pattern is filed on a quarterly basis with the Stock Exchanges and also displayed on the Company's website www.cardindia.com.
15. DISCRETIONARY REQUIREMENTS:
Pursuant to the Regulation 27(1) of the Listing Regulations company is complying with following discretionary requirements.
a) Company has appointed separate person to the post of Chairperson and Managing Director.
b) The Internal auditor of the company directly report to the Audit Committee.
16. GENERAL SHAREHOLDER INFORMATION:
a) AGM Information and Financial Year:
Day, Date and Time of AGM : Friday, 12th August, 2016 at 12.00 noon.
Venue : Registered Of?ce of the Company
Financial Year : 1st April 2015 to 31st March 2016
Date of Book Closure : 6th August, 2016 to 12th August, 2016 (both days inclusive)
Dividend Payment Date : On or after 12th August, 2016
b Listing on Stock Exchanges and Scrip Code:
The Company's shares have been listed on the following exchanges:
i. National Stock Exchange of India Limited (NSE),
Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai – 400 051.
NSE Code: INDIANCARD
ii. BSE Ltd. (BSE),
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001. Scrip Code
BSE Code: 509692
Annual listing fees have been paid for the financial year 2015-16.
c) Registrar & Share Transfer Agent and Share Transfer System:
The Company has changed its Registrar & Share Transfer Agent and has appointed Karvy Computershare Pvt. Ltd. (“M/s. Karvy”) as its new Registrar & Share Transfer Agent in place of Sharepro Services India Private Limited, earlier Registrar & Share Transfer Agent (RTA) of the Company with effect from July 1, 2016.
Share transfer and transmission is processed by M/s. Karvy on fortnightly basis. Address of M/s. Karvy is as follows:
Karvy Computershare Private Limited,
Karvy Selenium Tower B, Plot No.31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500 032
Tel. : (040) 67162222 Fax. : (040) 23420814 E-mail : firstname.lastname@example.org
d) Share Transfer System:
Transfer in physical form has to be lodged with Registrar and Share Transfer Agents. All shares received for transfer were registered and dispatched within thirty days of receipts, if the documents were correct and valid in all respects. The time taken to process dematerialization of shares is ten days upon receipt of documents from Depository Participant.
e) Dematerialization of shares and liquidity:
Company's equity shares are being dealt with in dematerialized form and the ISIN is INE061A01014.
As on 31st March, 2016, 4,381,809 (96.28%) Number of Shares are in demat form.
f) Outstanding GDR / Warrants or convertible bonds, conservation dates and likely impact on liquidity:
The Company has not issued any GDRs/ ADRs/ Warrants or other instruments, which are pending for conversion.
g) Plant Location:
Pimpri, Pune – 411 018, Maharashtra, India.
Tel.: (020) 39858200 Fax: (020) 39858300
Nalagarh (HP) Works
Village Manjholi, Nalagarh Roper Road, Tehsil Nalagarh, Dist. Solan 174 101, Himachal Pradesh
Tel.: (01795) 393401 / 429 Fax: (01795) 393440
h) Financial Calendar of the Company relating to future immediate reporting:
The Financial year covers the period from April 1, 2016 to March 31, 2017 and the calendar of the Company relating to future immediate reporting is given below:
Quarter ending 30th June, 2016: Upto 14th August, 2016
Half Year ending 30th September, 2016 :Upto 14th November, 2016
Quarter ending 31st December, 2016: Upto 14th February, 2017
Year ending 31st March, 2017 :Upto 30th May, 2017
Annual General Meeting for the year ended March 31st, 2017. :Upto 30th September, 2017
i) Unclaimed Dividend:
? All unclaimed/unpaid dividend amounts for the financialyear 2007-08 have been transferred to Investor Education & Protection Fund and no claims will lie against the Company or the Fund in respect of the unclaimed amounts so transferred.
? The unclaimed dividend in respect of the financialyear 2008-09 declared on 14th August, 2009 can be claimed by the shareholders by 19th October, 2016.
j) Address for Correspondence:
The Indian Card Clothing Company Limited
Mumbai – Pune Road, Pimpri, Pune – 411 018.
The Management Discussion & Analysis is annexed to the Directors Report, forming part of the Annual Report.