REPORT ON CORPORATE GOVERNANCE
The Board of Directors of the Company lays great emphasis on the broad principles of Corporate Governance. The report on corporate governance for the year 2014-15 is given below:
1. Company's Philosophy on Code of Governance:
Philosophy on Corporate Governance envisages the attainment of the highest level of transparency and accountability, in all facets of its operations and in all its interactions with its stakeholders including shareholders, employees, the Government and the lenders.
The essence of the Corporate Governance practices across Kothari Fermentation & Biochem Limited (KFBL) is the balance struck between independent decision making and effective business controls. Essentially, at KFBL promotion of efficient Corporate Governance practices is not only a statutory requirement but an important business enabler that helps realize long term goals while optimizing stakeholder returns.
2. Board of Directors:
The Board of Directors along with its Committees is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the company and has been vested with requisite powers, authorities and rules. The Board of Directors consists of five Directors viz. Mr. Pramod Kumar Kothari (Chairman and Managing Director), Mrs. Kavita Devi Kothari (Whole-Time Director), Mr. Prasanna Kumar Pagaria, Mr. Ratan Lal Dudheria and Mr. Kapil Dev Puri. Mr. Pramod Kumar Kothari and Mrs. Kavita Devi Kothari a re the Executive Directors and the other three Directors are Independent Non-Executive Directors. The Board of the company, therefore, meets the composition criteria as required under appl icable legislation.
The composition of the Board represents an optimal mix of professionalism, knowledge and experience and enables the Board to discharge its responsibilities and provide effective leadership to business. Mr. Pramod Kumar Kothari looks after technical, legal, marketing fu nctions and overall management of the company.
Composition & Category of Directors___
(ii) Appointment & Tenure:
The Directors of the Company are appointed by the shareholders at General Meetings. All Executive Directors are subject to retirement by rotation and at every AGM, 1/3 rd of such Directors as are liable to retire by rotation, if eligible, generally offers themselves for re -appointment, in accordance with the provisions of Section 152 of the Companies Act, 2013 and that of the Articles of Association of the Company. The Executive Directors on the Board serve in accordance with the terms of their contracts of service with the Company.
(iii) Board meetings:
During the year under review, 6 Board meetings were held on 30th May, 2014, 14th August, 2014, 17th September, 2014, 14th November, 2014, 14th February, 2015 and 25th March, 2015. The information stipulated under Annexure X to Clause 49 is being made available to the Board. The compos ition of the Board of Directors, Atte ndance of Directors at the Board Meetings and Annual General Meeting as also the number of other directorships in other Indian Public Limited Companies and memb erships of the committees of the Board of suchother companies are as follows:
All independent directors are persons of eminence in their respective fields and bring a wide range of expertise and experience to the Board. The Independent Directors have submitted their declaration that they fulfill the requiremen ts as stipulated in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Pursuant to clause VII (1) of Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors had a separate meeting on 14.02.2015, wherein they reviewed the performance of the Executive Directors and discussed other matters.
The Independent Directors on appointment are issued a formal letter of appointment covering their rights, roles, etc. They are also familiarized with the recent happenings and developments of the Company through various programmes/ presentations conducted periodically.
) Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an Annual Performance Evaluation of its own performance and the Directors individually. The manner of evaluation of Independent Directors, Chairman and the Board as a whole was done at a separate meeting held by Independent Directors. The performance evaluation of Independent Directors was done by entire Board, excluding Directors being evaluate d.
3. Committees of the Board
There are three committees of the Board of Directors, which have been delegated adequate powers to discharge their respective functions. These Committees are - (i) Audit Committee, (ii) Nomination & Remuneration Committee and (iii) Stakeholders Relationsh ip Committee. The Company Secretary is the Secretary for all the Committees of the Company.
(i) Audit Committee
• Terms of Reference
As per clause 49 of the Li sting Agreement and Section 177 of the Companies Act, 2013 , an Audit Committee exists which has been delegated all the requisite functions and powers.The broad terms of reference are:
• Supervision of the Company's internal controls and the financial reporting process and r eviewing the adequacy of the internal audit control systems with the management, external & internal auditors
• Recommendation to the management , the appointment, re -appointment, replacement o r removal of statutory auditors and fixation of their remuneration and other terms of appointment.
•Reviewing the internal & external auditors' performance and independence along with the effectiveness of the audit process.
• It also discusses the major financial and risk management policies followed by the company.
• Approving the transactions of the Company with the Related - parties.
•It also scrutinizes the inter-corporate loans and investments.
• Reviewing the functioning of the Vigil Mechanism/ Whistle Blower policy.
• Finalization of Quarterly Results and Annual Accounts for the recommendation to the Board of Directors. The minutes of the Audit Committee meetings are regularly placed before the Board of Directors in their meeting and approved by them
• Terms of Reference
The role of the committee is to devise policy on the Board's diversity. Its function is to recommend to the Board the appointment, removal and the overall evaluation of every director's performance. It has to also recommend criteria for determining qualifications, positive attributes and independence of a director and also recommending the remuneration policy for the directors, key managerial personnel and other employees. The Committee also formulates the criteria for evaluation of Independent Directors and the Board.
• Remuneration Policy
The Board has adopted a Remuneration Policy as recommended by the Nomination & Remuneration Committee. The Remuneration payable to the Directors and employees is linked with the performance of the company. The other criteria's for determining Managerial remuneration has been provided earlier in the Board's Report.
Non- Executive Directors:
No Remuneration was paid to Non-executive Directors during the year 2014-15. Further no sitting fee was paid to the non-executive Directors during the year 2014-15 as decided by themselves for not accepting any sitting fees.
(iii) Stakeholders Relationship Committee: • Terms of Reference
The Committee review the reports submitted by the RTA on quarterly basis. It also looks into the Investor's grievance redressal system and also reviews the effectiveness and adequacy of the same. It also expedites the process of share transfers and look into investor complaints. The Committee also monitors the implementation and compliance with the Code of Conduct for prevention of Insider Trading.
• Composition, Meetings and Attendance during the year
The Committee met 4 times during the year, i.e. on 30.05.2014, 14.08.2014, 14.11.2014 and 14.02.2015 and the attendance at the meetings was as follows:
Name, Designation & Address of the Compliance Officer
Mrs. Isha Gupta, Company Secretary-cum-Compliance Officer Kothari Fermentation & Biochem Ltd., 1stFloor, 16, Community Centre, Saket, New Delhi - 110017 Tel. : 2685004, 40590944 E-mail : email@example.com
• Shareholders complaints and disposal thereof
The complaints of the shareholders are either addressed to the Company Secretary or the share transfer agents of the company i.e. Abhipra Capital Limited. The status of pending shareholder's/ investo r's complaints is regularly reviewed at the Shareholders Relationship Committee Meeting on quarterly basis. There was no investor complaint pending as on 31.03.2015. There was no pending share transfer ason 31.03.2015.
As per clause 47 (f) of the Listing Agreement an email, id i.e. firstname.lastname@example.org has been designated especially for the redressal of the security holders grievances, by the company. The mails are periodically reviewed by the Committee. 5 Investor Grievance were received and attended during the Year 2014-15 mainly related to change of address, demat, etc. The Company generally attends all queries of investors within a period of fortnight from the date of receipt.
(i) (ii) The Company has no subsidiary company.
The transactions with the related parties, in which Directors, relatives or the management, etc., are interested, havebeen incorporated in Note No. 3 4, forming part of Annual Accounts, as per Accounting Standard 18. There are no materially significant related party transactions during the year that have potential conflict with the interest of the Company at large.
(iiiNo penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any Statutory Authority on any matter related to capital markets for non-compliance by the company during the last three years Financial statem ents of the company are prepared in accordance with the Accounting Standards and the relevant
General Shareholder Information
(i) 25thAnnualGeneral Meeting:
Venue:“Bipin Chandra Pal Memorial Trust Auditorium”, Satindra Mohandev Charitable Medical Centre, A-81, Chittranjan Park, New Delhi-110019
Time : 10:30A.M.
Day & Date : Wednesday, the 30th day of September, 2015
Tentative Financial Calendar:
1. First Quarterly Results : (Unaudited/Limited Review ) : July-August 2015
2. Second Quarterly Results : -Do-: October-November 2015
3. Third Quarterly Results-: Do- : January-February 2016
4. Fourth Quarterly Reslts : -Do-: April-May 2016
5. Annual Results (Audited) - : May 2016
Share Transfer Books and Register of Members shall remain closed from Wednesday, 23rd day o f September, 2015 to Wednesday, the 30th day of September, 2015 (both days inclusive).
(iv) Dividend Payment Date
The Board of Directors has not recommended any dividend during the year.
(v) Listing on Stock Exchanges and Stock Code s
BSE Ltd., Phiroze Jeejeebhouy Towers, 25 th Floor, Dalal Street, Mumbai – 400 001.: 507474
2.The Delhi Stock Exchange Ltd., DSE House, 3/1 Asaf Ali Road, New Delhi –110 002*: 6395
3.The Calcutta Stock Exchange Association Ltd., 7, Lyons Range, Kolkata –700001.: Applied for Delisting on 12th June, 2000
4. Jaipur Stock Exchange Ltd., Stock E xchange Building, Jawaharlal NehruMarg, Malviya Nagar, Jaipur – 302 017*: Do-
ii) Registrar and Transfer Agents
Abhipra Capital Limited, Abhipra Complex, Dilkhush Industrial Area, A-387, G.T. Karnal Road, Azadpur, Delhi - 110033 Tel.: 011 - 42390725, 42390708
(viii) Share Transfer System
The Managing Director, Executive Director and the Company Secretary/ Compliance Officer are individually authorized to attend to share transfers and issue of duplicate share certificate s. once a fortnight.
The share transfers affec ted by the above delegated authority are approved by the Stakeholders Relationship Committee once in a quarter.
The share transfer requests received in physical form by the Company or the Company's Registrar and Transfer Agent, are registered within a period of 15 days from the date of receipt. Requests for dematerialization received from the shareholders are affected within a period of maximum15 days.
Dematerialization of Shares and Liquidity
The shares of the company fall under the category of compulsory delivery in dematerialized form by all categories of investors. The company has signed agreements with both the Depositories i.e. National Securities Depository Limited and Central Depositories Services (India) Limited. The company's shares bear ISIN INE991B01010 with both the depositories. About 91.58% of the issued share capital of the company was held in Demat Mode as on 3F March, 2015.
(xi) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments- Not Applicable
(xii) Location of Plant
Village Rajarampur, Industrial Area, Sikandrabad, DistrictBulandshahr (U.P.) - 203205
(xiii) Address for Correspondence:
> With the Company:
Kothari Fermentation & Biochem Ltd., 1st Flo or, 16, Community Centre, Saket, New Delhi - 110017 Tel.: 0 11 - 2685004, 40590944 E-.....I I'tbl: ,nt......I in Wbit. koth.ii--. tin
> With the R & T Agent
The shareholders may also address their correspondence to the RTA of the Company; their address is given in point no. (v) above.
> As per clause 47(f) of the Listing Agreement, the company has designated an e -mail id for the investors' grievance redressal, i.e. email@example.com
(xiv) Investor Relations
All the queries received from shareholders during the Financial Year 2014-15 have been responded by the R&T Agent and generally replied to within a fortnight.
8. CEO/ CFO Certification: Pursuant to the provisions of Clause 49 of the Listing Agreement, a certificate on the Financial Statements from CEO / CFOis issued and is annexed and forms part of the Annual Report.
9. Compliance: The certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges is annexed with this report.
10. Declaration of Compliance with Code of Conduct:
This is to certify that as provided under Clause 49(I)(D)(ii) of the Listing Agreement with the Stock Exchanges, theBoard members and the Senior Management personnel have affirmed to the compliance with Code of Conduct and Ethics for the twelve months period ended 31st March, 2015. The non-mandatory requirements, wherever necessary, have been complied with.
For and on behalf of the Board
Pramod Kumar Kothari
Chairman & Managing Director
Date: 14th of August, 2015
Place: New Delhi