CORPORATE GOVERNANCE REPORT:
The Directors present the Company's Report on Corporate Governance pursuant to the SEBI (LODR) Regulations 2015.
1. Company's philosophy on Code of Governance
JCT has full belief that the sound corporate governance is essential for the success of its operations in the long term. The organization success is truly a reflection of the professionalism, conduct and ethical values of its management and employees. Our Company strives to ensure transparency in all its operations, make disclosures and comply with various laws and regulations.
2. Board of Directors
In terms of the Company's Corporate Governance Policy all statutory and other significant & material information are placed before the Board to enable it to discharge its responsibility of strategic supervision of the Company as trustees of the Shareholders.
a) Composition and Category of the Board of Directors
During the year ended 31.03.2016 the Board of the Company had Six Directors out of which two are Executive Directors including one women Director, Three are Independent Directors and One Nominee Director, which constitutes 50% as Independent Directors on the Board. The Chairman of the Board isan Executive Director. The Board consists of eminent individuals from industry management, technical, financial and marketing. None of the Directors on the board, is a member of more than 10 committees and Chairman of more than 5 committees. Necessary disclosures regarding directorship held in other companies and committee positions as on 31.03.2016 have been made by Directors.
c) Ms. Priya Thapar- Director (HR) issisterof Mr. Samir Thapar- Chairman and Managing Director.
d) Mr. G B Kathuria, Dr AK Doshi, Mr. C M Bhanotand Mr. S KSinghala does not have any shareholding in the Company.
e) Familiarization Programme for Independent Directors.
Atthe time of appointing a Director, a formal letterof appointment isgiven to him, which inter-alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. Quarterly updates on relevant statutory changes and landmarkjudicial pronouncements encompassing important laws are regularly circulated to the Directors. Site visitsto plant locations are organizedforthe Directors to enable them to understand the operations of the Company. The details of such familiarization programme for Independent Directors are posted on the website of the Company i.e. www.jct.co.in
f) Board Meetings
During the financial year 2015-16, the Board of the Company met 6 timeson 19.05.2015, 13.08.2015, 29.09.2015, 07.11.2015,13.02.2016 and 28.03.2016. The interval between two meetings is less than 4 months which is well within the maximum period under Section 173 of the Companies Act, 2013 and the Listing Agreement and/or SEBI (LODR) Regulations, 2015.
The notice of each Board Meeting is given in writing to each Director. The Agenda along with relevant notes and other material information are sent in advance separately to each Director.
In case of business exigencies or urgency of matters, resolutions are passed by circulation and same is placed before the Board in the next meeting. Besides performance of Company's operations before taking on record the quarterly / annual financial results of the Company, information supplied to the Board. All relevant information as required under Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was placed before the Board from time to time.
COMMITTEES OF THE BOARD
3. Audit Committee
a) Terms of Reference
The Audit Committee's purpose is to oversee the accounting and financial process of the Company, the audits of the Company's financial statements, the appointment, independence, performance and remuneration of the statutory auditors including the Cost auditors, the performance of internal auditors and the Company's risk management policies. The terms of reference of Audit Committee coverthe areas mentioned under Part C of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as well as Section 177 of the Companies Act, 2013.
The Audit Committee consists of four Directors, three of whom are Non-Executive Independent Directors i.e. Mr. Gordhan Bhojraj Kathuria, DrAjit Kumar Doshi, Mr. ChanderMohan Bhanotand Mr. Suresh Kumar Singhala who is a Nominee Director For Allahabad Bank. Mr. Gordhan Bhojraj Kathuria isthe Chairman of the Committee. All members of the Audit Committee are financially literate and bring in expertise in the fieldsof Accounting, Finance and Taxation. Mr. SamirThaparand Ms. Priya Thapar are the permanent invitees.
Chief Financial Officer, Auditors including Statutory, Internal and Cost and other functional heads including Non-Independent Executive Directors are regularly invited by the Audit Committee to its meetings. Company Secretary acts as a Secretary of the Committee.
The quorum, power role and scope are in accordance with the Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the SEBI (LODR) Regulations, 2015.
c) Meetings and Attendance
The Committee met six times during the Financial Year ended 2015-16 on 19.05.2015, 13.08.2015, 29.09.2015, 07.11.2015, 13.02.2016 and 28.03.2016. The maximum gap between any two meetings was less than four months which is in compliance with the provisions of SEBI (LODR), Regulations 2015. Adequate quorum was present for all Meetings. The Chairman of the Audit Committee was present at the Annual General Meeting of the Company. The Table below provides the attendance of the Audit Committee members.
4. NOMINATION AND REMUNERATION COMMITTEE
In compliance with Section 178 of Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee comprises of atleast 3 Directors all of whom shall be non-executive.
a) Term of Reference
The Nomination and Remuneration Committee assistthe Board in overseeing the method, criteria and quantum of compensation for directors and senior management based on their performance and defined assessment criteria.
• formulates the criteria for evaluation of the performance of Independent Directors & the Board of Directors;
• identifying the persons who are qualified to become directors, and who may be appointed in senior management; and
• recommend to the Board their appointment and removal.
The terms of the reference of Nomination and Remuneration Committee coversthe areasmentioned under Part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as well as section 178 of the Companies Act, 2013.
b) Composition, Meeting and Attendance:
The committee at present comprises of three non-executive Directors. Mr. Gordhan Bhojraj Kathuria isthe Chairman of the Committee and the other members include Dr Ajit Kumar Doshi and Mr Chander Mohan Bhanot. Two meetings of the committee were held on 29.09.2015 and 07.11.2015 and all the members were present in the meeting.
c) Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) 2015, a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board who were evaluated on parameters such as level of engagement and contribution and independence of judgment thereby safeguarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The board also carried out annual performance evaluation of the working of its Audit, Nomination and Remuneration as well as stakeholders relationship committee. The Directors expressed their satisfaction with the evaluation process.
5. REMUNERATION OF DIRECTORS
a) Remuneration policy of the Company aimed at attracting and retaining high caliber talent. The policy therefore takes into account the remuneration trends in the industry and the competitive requirement of its business. There is no such pecuniary relationship between the Company and Non Executive Directors.
Remuneration to Executive Directors
The appointment and remuneration of Executive Directors including the Chairman & Managing Director and Whole-time Director is governed by the Remuneration and Nomination Committee, resolutions passed by the Board of Directors and shareholders of the Company. Paymentof remuneration to Executive Directors is governed by the respective Agreements executed between them and the Company.The remuneration package ofChairman & Managing Director and Whole-time Director comprises of salary, perquisites, allowancesand contribution to Provident and other Retirement Benefit Funds as approved by the shareholders at the General Meeting.
6. Stakeholders Relationship Committee
a) Composition and Attendance:
The Committee comprises of Three Directors, Dr Ajit Kumar Doshi, Mr. Gordhan Bhojraj Kathuria and Mr. Chander Mohan Bhanot, all Non-Executive Independent Directors. Dr Ajit Kumar Doshi isthe Chairman of the Committee. The Committee meets normally once in three monthsto oversee proper redressal of grievances of stakeholders/ investors and compliance of stipulation in the matter of listing of shares with stock exchange/ depositories etc. The matter of transfer/transmission of shares, sub-division/consolidation and issue of new/duplicate shares etc. including demat/ rematof shares in the normal course are looked after by the Committee of Senior Executives consisting of Mr.Vinod Kumar Singhal -Controllerof Finance &Accounts, Mr. Jitender Khanna - Vice President (Secretarial and Legal)and Ms Nidhi Goel - Company Secretary, who have been authorized by the Committee for the same.
The Committee met 4 times during the year on 19.05.2015, 13.08.2015, 07.11.2015 and 13.02.2016 which was attended by all the members.
b) Name and Designation of the Compliance Officer
Ms Nidhi Goel, Company Secretary
c) Number of complaints received, not solved & pending
During the year, 23 complaints were received and replied to the satisfaction of the shareholders. There were no pending complaints as on 31st March, 2016. There is no share transfer or any correspondence pending for more than 15/30 days (as may be applicable) as on date of this report. The Company also have exclusive email-id i.e. email@example.com for investors to contact the Company in case of any information and grievance.
d) Terms of Reference
The Committee shall consider and resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-receipt of annual report and non-receiptof declared dividends.
7. ALLOTMENT COMMITTEE
The Company has constituted a Share Allotment Committee on 07.11.2015. The terms of reference of share allotment committee includes to look into the allotmentof2,80,00,000 Equity Sharesto AlportLimited for conversion and cancellation of14,00,000 Optionally Convertible Preference Shares.
Mr Samir Thapar is the Chairman of the Committee and Dr Ajit Kumar Doshi and Mr Chander Mohan Bhanot are the members of the Committee. A meeting of the allotment committee was held on 31.12.2015 and all the members have attended
b) Resolution through Postal Ballot
During the year, pursuant to the provisions of Section 110 of the Companies Act 2013, read with the Companies (Management and Administration) Rules 2014, the Company has conducted two events Postal Ballot and passed the Special Resolutions as per the details given hereunder.
A. The Company as per Postal Ballot Notice dated 22.06.2015, which was published on 29.06.2015, passed a Special Resolution in connection with the Creation of charges on the moveable and immoveable properties of the Company both present and future in respect of borrowings, pursuant to the provisions of Section 180 (1)(a) of the Companies Act, 2013 and other applicable provisions.
Procedure for Postal Ballot:
• The Board of directors through Circular Resolution dated 22.06.2015, appointed Ms. Seema Sharma, a practicing company secretary as the Scrutinizer for conducting the Postal Ballotvoting Process.
• The Company had completed on 26.06.2015, the dispatch of postal ballot forms along with prepaid business reply envelopes to its members whose names appeared on the Register of Members/list of beneficiaries son 19.06.2015.
• All postal ballot forms received up to the close of working hours on 29.07.2015, the last date fixed for receipt of the postal ballot forms, had been considered in scrutiny.
• The result of the Postal Ballots was announced on 31.07.2015 at the Registered Office of the Company.
B. The Company as per Postal Ballot Notice dated 13.02.2016, which was published on 22.02.2016, passed two Special Resolutions.
• The Company has appointed Ms. Seema Sharma, Practicing Company Secretary a Scrutinizerto conduct Postal Ballot (physical and e-voting) process in accordance with the law in a fair and transparent manner. The details of the voting pattern in respect of Special Resolutions passed were as under:
Procedure for Postal Ballot:
• The Board of directors of the Company had at its meeting held on 13.02.2016, appointed Ms. Seema Sharma, a practicing company secretary as the Scrutinizer for conducting the Postal Ballot voting Process.
• The Company had completed on 20.02.2016, the dispatch of postal ballot forms alongwith prepaid business reply envelopes to its members whose names appeared on the Register of Members/list of beneficiaries son 12.02.2016.
• All postal ballot forms received up to the close ofworking hours on 23.03.2016, the last date fixed for receipt of the postal ballot forms, had been considered in scrutiny.
• The result of the Postal Ballots was announced on 25.03.2016 at the Registered Office of the Company
10. General Shareholder Details
a) Annual General Meeting
Time, Day, Date & Venue : 11.30 A.M, Friday, the 12th August, 2016 Village Chohal, District Hoshiarpur (Punjab) 146024
b) Financial Calendar(Provisional)
Unaudited results for QE 30.06.2016 Unaudited results for QE 30.09.2016 Unaudited results for QE 31.12.2016 : Within 45 days of the close of the respective
Audited results YE 31.03.2016 : Within 60 days of the close of the year.
c) Dividend Payment Date : No Dividend is proposed
d) Name and address of stock exchange : BSE Ltd., Phiroze Jeejeebhoy Towers Dalal Street, Mumbai-400001
e) Annual Listing Fees : Annual Listing fee for the year 2015-16 was paid.
f) Stock Code : 500223
h) Performance in comparison to broad base indices such :
The shares of the Company are not considered as BSE Sensex & Crisil Index by stock exchanges in their index fluctuations.
i) The Securities were not suspended from trading during the financial year 2015-16. j) Registrar & Transfer Agents :
RCMC Share Registry Private Ltd, B-25/1, 1 st Floor, Okhla Industrial Area Phase II, New Delhi-110020 Tel: 011-26387320-321-323 Fax: 011-26387322 Email: firstname.lastname@example.org
k) Share Transfer System :
The system for transfer of shares in physical form is delegated to Share Transfer Committee of Senior Executives of the Company which meets once in a fortnight and the average time taken for transfer of shares is approximately 15/30 days. The Company obtains from a Company Secretary in practice half yearly certificate of compliance as required under Clause 47 (c) of the Listing Agreement of the Stock Exchange and as per Regulation 40(9) of SEBI (LODR) Regulations, 2015
m) Dematerialization of shares and liquidity
As on 31.03.2016, 98.54 % of equity shares have been dematerialized.
- National Securities Depositories Limited (NSDL) : 517474188
- Central Depositories Services Limited (CDSL) : 58758098
o) Plant Locations : Textile units at Phagwara (Punjab) Filament Yarn Unit at Hoshiarpur (Punjab)
p) Address for correspondence : Village Chohal, District Hoshiarpur-146024 (Punjab) Or
305, Rattan Jyoti Building, 18 Rajendra Place New Delhi-110008
11. OTHER DISCLOSURE
a) Related Party Transactions
All transactions entered into with the Related Parties as defined under the Companies Act,2013 and SEBI (LODR), Regulations 2015 during the financial year were in the ordinary course of business and on arm's length basis and do not attract the provision of Section188 of the Companies Act, 2013. Related party transactions with the Directors, Senior Management, Personnel and their relatives are reported to the Audit Committee from time to time and have been disclosed under the Related Party Transactions as per Accounting Standard 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants Of India (ICAI) which are set out in the Annual Report and other relevant notes to the financial statements for the year ended 31.03.2016. There were no materially significant Related Party Transactions that may have potential conflict with the interest of the Company at large.
b) Details of non-compliance, penalties etc. imposed by Stock Exchanges, Securities Exchange Board of India (SEBI) etc. on any matter related to capital markets, during the last three years
No stricture/ penalties have been imposed on the Company by the Stock Exchange(s) or SEBI or any statutory authority on any matters related to Capital Markets during the last three years.
c) Vigil Mechanism/Whistle Blower Policy
Pursuant to Section 177(9) and (10) of the Companies Act, 2013 and SEBI (LODR), Regulations 2015, the Company has formulated a Whistle Blower Policy for vigil mechanism for Directors and Employees to report to the management about the unethical behavior, fraud or violation of Company's Code of Conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and make provisions for direct access to the Chairperson of the Audit Committee in exceptional cases.
The practice of the Whistleblower Policy is overseen by the Audit Committee of the Board and Mr Jitender Khanna - Vice President (Secretarial & Legal) is the Vigilance Officer. None of the personnel of the Company has been denied access to the Audit Committee. The confidentiality of those reporting violations is maintained and they are not subject to any discriminatory practice. The Policy is available on the website of the Company www.jct.co.in
d) Mandatory & Non mandatory requirements
The Company has fully complied with mandatory requirements as stipulated under SEBI (LODR), Regulations 2015 with the Bombay Stock Exchange and non mandatory requirement as and when required or necessary to do so.
e) Subsidiary Companies
Company does not have any Subsidiary Company. Therefore there is no weblink where policy for determining 'material' subsidiary is disclosed. Further the provision of Regulations 24 of SEBI (LODR) Regulations, 2015 does not applicable on Company.
f) Related party transaction policy
As required under the SEBI (LODR), Regulations 2015, the Company has formulated a policy dealing with the related party transactions. The Policy is available on the website of the Company www.jct.co.in
12. NON COMPLIANCE
Company has complied with all the requirement/disclosures as mentioned in sub paras (2) to (10) ofCorporate Governance Report as given in part C of Schedule V of SEBI (LODR) Regulations, 2015.
13. The status of compliance of Discretionary non Mandatory requirements as prescribed in Part E of the SEBI (LODR), Regulations 2015 are as under:
• The Board : The Chairman of the Company is Executive Chairman and hence this provisions is not applicable
• Shareholders' Right:The quarterly, half yearly and annual financial results of the Company are published in newspapers on all India basis and are also posted on the Company's Website. Significant events are also posted on Company's Website.
• Modified Opinion: The observation of the Auditors have been fully explained in the Independent Auditors Report.
• Mr. Samir Thapar is the Chairman and Managing Director of the Company.
• Reporting of Internal Auditors: The Internal Auditors are directly reporting to the Audit Committee.
14. STATUS OF COMPLIANCE
a) Code of Conduct
The Board of Directors of the Company plays an important role in ensuring good governance and has adopted the Code of Conduct for Directors and Senior Management Personnel. The Code is applicable to all the Board Members and Senior Management of the Company. A copy of the same is available on Company's website www.jct.co.in.The Managing Director has also confirmed and certified the same.
b) Risk Assessment (17(9))
Board has apprised of the assessment done of the risk factors and the management policy for the control and minimization of the same during the year. There is elaborate system for the assessment and control on continuous basis.
c) Risk Management Committee
For the Year 2015-16, our Company does not qualify to be in Top 100 Listed Company therefore the provisions of Regulations 21 of SEBI (LODR) Regulations, 2015 does not applicable.
d) Independent Directors
The Non-Executive Independent Directors fulfill the conditions of Independence specified in section 149(6) of the Companies Act, 2013 and Rules made there under and meet the requirements of Regulation 25 of SEBI (LODR) Regulations, 2015.
A formal letter of appointment to Independent Director has been issued and disclosed on the website of the Company viz. www.jct.co.in
During the year under review, the Independent Directors met on 19.05.2015 and 28.03.2016 inter alia, to discuss.
(i) Review the performance of non-independent directors and the board of directors as a whole;
(ii) Review the performance of the chairperson of the Company, taking into accountthe views of executive directors and non-executive directors;
(iii) Assess the quality, quantity and timeliness of flow of information between the management of the Company and the board of directors that is necessary for the board of directors to effectively and reasonably perform their duties.
e) Corporate Social Responsibility Committee
Company has a Corporate Social Responsibility Committee consisting of Mr. SamirThapar, Ms. Priya Thapar and Mr. G B Kathuria. Mr. SamirThapar acts as Chairman of the Committee.
During the year 2015-16 the provisions of Section 135(5) were not applicable to the company, therefore no meeting was held during the year.
(iii) Term of Reference
• Decide the CSR activities to be taken up by the Company in accordance of this policy
• Decide the amount to be allocated for each project or activity
• Oversee and monitor the progress of the initiatives rolled out under this policy and
• Submit a report to the Board of Directors on all CSR activities undertaken during the financial year which shall duly be displayed on the Company's website www.jct.co.in
f) Insider Trading Code
The Securities and Exchange Board of India vide its Notification dated January 15, 2015 has notified The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (New Regulations) which has come into effectfrom May 15, 2015 Underthe New Regulations, the requirements of initial disclosures are applicable to promoter, key managerial personnel and director of a Company and requirements of continual disclosures are applicable to promoter, employee and director of a Company. The Company Secretary is the Compliance Officer for monitoring adherence to the said Regulations and has laid down an effective monitory system for the said purposes.