REPORT ON CORPORATE GOVERNANCE
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Corporate Governance is about promoting Corporate fairness, transparency and accountability. The Company believes that, the Corporate Governance Code will protect the shareholders rights, minimise risk and enhance value in the investment process. The ultimate purpose thus is to create a self driven, self assessed and self regulated organization in a competitive business environment.
The following is a report on the status and progress on major aspects of Corporate Governance.
2. BOARD OF DIRECTORS
I) The composition of the Board of Directors as on 31st March, 2015 is as follows:
As on 31st March, 2015, the Company’s Board consists of Eight Directors having considerable professional experience in their respective fields. Out of them five are Independent Directors, three are Executive directors of which one is Whole time woman director.
The Composition of the Board is in Conformity with clause 49 of Listing Agreements with Stock Exchanges and as per Companies Act, 2013 which is effective as on 31st March, 2015.
The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanship / Memberships held by them in other companies is given below. Other directorships do not include alternate directorships, directorships of Private Limited Companies, section 25 companies, and of companies incorporated outside India. Chairmanship / Membership of Board Committees include only Audit committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.
The present directors of Mr. Manikam Ramaswami - Managing Director and Mrs. Valli M Ramaswami are "Relative" of each other as defined in Section 2(77) of the Companies Act, 2013 and Rule 4 of the Companies (Specification of definition details) Rule 2014. Rules
The information on the Directors retiring by rotation and eligible for reappointment at the ensuing AGM is furnished in the AGM notice.
II) Board Meetings & AGM
During the year under review four Board meetings were held i.e. on 23rd May 2014, 01st August 2014, 12th November 2014 and 11th February 2015. The Company regularly furnishes all the relevant information, as recommended by the Securities and Exchange Board of India/Stock Exchange, to the Board.
III) Remuneration to Directors
No remuneration other than the sitting fees and other expenses (traveling, boarding and lodging incurred for attending the Board/ Committee Meetings) were paid to the non-executive Directors in 2014-2015.
2. CODE OF CONDUCT FOR BOARD MEMBERS AND SENIOR MANAGEMENT
The Board of Directors has laid down the code of conduct for all the Board members and members of the Senior Management of the Company. Additionally all independent directors of the company shall be bound by duties of independent directors as set out in the Companies Act, 2013 read with the Schedules and Rules thereunder.
All the Board members and Senior Management personnel have affirmed compliance with the code of conduct.
The Code of Conduct is available on the website of the company.
3. BOARD COMMITTEES
The terms of reference of Board Committees are determined by the Board from time to time. Presently the Company has Five committees i.e Audit Committee, Nomination and Remuneration Committee, Corporate social Responsibility Committee, Stakeholders Relationship Committee and Risk Management Committee. All the decisions pertaining to the constitution of the Committees, appointment of members, and fixing of terms of reference for committee members are taken by the Board of Directors. Details on the role and composition of these committees, including the number of meetings held during the financial year and the related attendance, are provided below:
(i) AUDIT COMMITTEE
The Audit Committee consists of three non-executive directors with Mr. KJM.Shetty (as Chairman), Mr. S. Venkataramani and Mr. Shridhar Subrahmanyam as members.
During the year the Committee met four times i.e. on 23rd May 2014, 01st August 2014, 12th November 2014 and 11th February 2015.
The terms of reference of the Audit Committee are in tandem with those laid down by stock exchange regulations and inter-alia includes the following:
a) Overseeing the Company's financial reporting process and ensuring correct, adequate and credible disclosure of financial information.
b) Recommending appointment and removal of external / internal auditors and fixing their fees.
c) Reviewing with management the annual financial statements with special emphasis on accounting policies and practices, compliance with accounting standards and other legal requirements concerning financial statements; and
d) Reviewing the adequacy of the Audit and compliance function, including their policies, procedures, techniques and other regulatory requirements.
The Statutory Auditors, Senior Vice President - Operations, Chief financial Officer, Company Secretary and other concerned executives of the Company attended the Meetings.
(ii) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE)
The Committee formulates and recommend to the Board, a CSR Policy and recommend the amount of expenditure to be incurred on CSR activities. Committees framed a transparent monitoring mechanism for implementation of CSR projects or programs or activities undertaken by the Company and also monitor CSR policy from time to time.
The CSR Committee of the Company consists of 2 NonExecutive Independent Directors and 1 Whole Time Director.
During the year the Committee had 2 meeting i.e. on 12th November 2014 and 11th February 2015.
iii) NOMINATION AND REMUNERATION COMMITTEE
This Committee shall identify the persons, who are qualified to become Directors of the Company / who may be appointed in Senior Management in accordance with the criteria laid down, recommend to the Board their appointment and removal and also shall carry out evaluation of every director's performance. Committee shall also formulate the criteria for determining qualifications, positive attributes, independent of the Directors and recommend to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.
The Nomination and Remuneration Committee of the Company consists of 3 Non-Executive Independent Directors including Chairman.
During the year the Committee had 1 meeting i.e. on 12th February 2015.
(iv) STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee (a) approves and monitors share transfers and transmissions, splitting and consolidation of shares and issue of duplicate share certificates and share certificates in case of rematerialisation of shares. All these requests are approved by the Committee once in a fortnight by way of circular resolutions. (b) looking into redressal of shareholders/ investors complaints viz. transfer of shares, non-receipt of declared dividends etc. and deciding on any other matter as may be required in connection with the shareholders/investors' servicing or redressal of their grievance and (c) carries out functions envisaged under the Code of Conduct for prevention of Insider Trading adopted in terms of Regulation12 (1) of the SEBI (Prohibition of Insider Trading) Regulations, 1992.
The Committee consists of 3 Directors, out of which 2 are Non-Executive Directors namely, Mr. K J M. Shetty and Mr. S. Venkataramani and 1 executive director namely Mr. P. Manivannan.
9 shareholder complaints in the nature of non-receipt of dividend warrants, non-receipt of share certificates after transfer, non-receipt of Annual Report etc were received during 2014-2015.
To monitor investor servicing on a continuous basis the Committee has directed the Company Secretary to forward to the Committee members a report on investors servicing on a periodical basis. All the complaints received from the shareholders during the year under review were resolved to the satisfaction of the shareholders.
The Company has designated an exclusive E-Mail ID for the purpose of registering complaints by investors and necessary follow up action by the Company / Compliance Officer in compliance with Clause 47(f) of the Listing Agreement. The e-mail ID is: firstname.lastname@example.org .
v) RISK MANAGEMENT COMMITTEE
The Company also has constituted a Risk Management Committee (Non-Mandatory) which ensures that the Company has an appropriate and effective Enterprise Risk Management system with appropriate policies and processes which carries out risk assessment and ensures that risk mitigation plans are in place by validating the same at regular intervals.
The Risk Management Committee of the Company consists of 2 Executive Directors and one Senior Management person.
(VI) INDEPENDENT DIRECTORS' MEETING
During the year under review , the Independent Directors met on February 11, 2015, inter alia to discuss:
i. review the performance of non-independent directors and the Board as a whole.
ii. review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive.
iii. assess 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.
4. PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 stakeholder relationship committee. The Directors expressed their satisfaction with the evaluation process.
5. RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.
The Board has approved a policy for related party transactions which has been uploaded on the Company's website.
6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report forms part of the Annual Report.
a) There were no materially significant related party transactions made by the Company with its Promoters, Directors or Management, or relatives etc., during the year that may have potential conflict with the interests of the Company. The Register of Contracts containing the transactions in which Directors are interested is placed before the Board regularly for its approval.
Transactions with related parties are disclosed in Note No.47 to the Accounts in this annual report.
b) The Company has complied with the statutory provisions, rules and regulations relating to the capital markets during the last three years and Stock Exchanges or SEBI or any statutory authority has not imposed any penalty or stricture on the Company.
8 GENERAL SHAREHOLDER INFORMATION
a) Annual General Meeting
Day : Thursday
Date : 24th September 2015
Time : 11.00 a.m.
Venue : 21/4, Mill Street, Kovilpatti: 628 501
b) Financial Calendar (tentative calendar of events and subject to change) for the year 2015-2016
Financial reporting for the quarter ending 30th June 2015 : End of July 2015
Financial reporting for the quarter ending 30th September 2015 : End of October 2015
Financial reporting for the quarter Ending 31st December 2015 : End of January 2016
Financial reporting for the quarter Ending 31st March 2016 : With in 60 days from the end of March 2016
Annual General Meeting for the year ending 31st March, 2016 : Last week of August 2016.
c) Book Closure period:
29th August, 2015 to 24th September, 2015 (As stipulated in the Listing agreement)
d) Share Capital:
The Share capital of the Company comprises of 48,16,446 equity shares of Rs.10/- each.
Your Directors recommend a Dividend of Rs.7.50 (75%) per equity share of Rs.10/- each for the financial year ended 31st March 2015. Dividend declared at the AGM will be paid on or before 23rd October 2015
f) Listing on Stock Exchange and stock code:
The Company's Equity shares are listed on the Stock Exchange, Mumbai. The of the Stock exchange and the stock code is given below:
Stock Exchange Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai- 400 001
Stock code: 514036
The Annual Listing fee for the year 2015 - 16 has been paid by the Company to the Bombay Stock Exchange Limited.
The Annual Custodian Fee for the year 2015-2016 will be paid on receipt of bill from NSDL and CDSL, for which request has been already made.
h) Share Transfer System:
M/s GNSA Infotech Ltd, Chennai are the Share Transfer Agent of the Company. The share transfer process is reviewed by the Stakeholder's Grievance Committee. The share transfer requests in physical form and other shares related issues are processed and dispatched to the respective lodgers within the statutory period, provided the documents are complete in all respects. To ensure better investor servicing, share transfers / transmissions are processed every fortnight. The total number of shares transferred / transmitted during the year was:
i) Dematerialization of shares:
The Company has entered in to an agreement with both NSDL & CDSL to have electronic depository facilities for the shares of the Company. As on 31st March 2015, 40,53,928 shares were in dematerialised form representing 84.168% of the total shares. The Demat ISIN code number of our share is INE970D01010
l) The Company has not issued any GDRs/ ADRs/ Warrants or any convertible Instruments during the year under review.
m) Plant locations:
Spinning, Knitting, Weaving, Ginning & Garments:
• 21/4, Mill Street, Kovilpatti - 628 501
• N Venkateswarapuram, N Subbiahpuram, Sattur Taluk -626 205
• Menakur Village, Naidupet Mandal, Nellore District, Andhra Pradesh - 524 221
• Arasanur, Thirumancholai Post, Sivagangai Taluk - 630 561
• Annarugudan Village, Tallada Mandal, Khammam District, Andhra Pradesh - Processing:
• C7 - 1, Sipcot Industrial Complex, Kudikadu, Cuddalore - 607 005
n) Means of Communication:
The quarterly financial results, as taken on record by the Board of Directors, are communicated to the Stock Exchange where the shares of the Company are listed. These results are also published in English dailies like the Business Line & Vernacular dailies like the Tamil Murasu and also on Bombay Stock Exchange's website <http://www.bseindia.com/>.
The annual reports are sent to all the shareholders. The
shareholding pattern is also available on the <http://www>. bseindia.com/ <http://bseindia.com/>.
o) Address for communication:
Loyal Textile Mills Ltd.
21/4, Mill Street, Kovilpatti - 628501 Tamil Nadu Phone : (04632) 2220001
Email : email@example.com
b.Registrar and Share Transfer Agent
GNSA Infotech Limited
STA Department, Nelson Chambers,
4th Floor, F Block, No.115 Nelson Manickam Road, Aminjikarai, Chennai - 600029
Phone: 044-42962025 E-mail: firstname.lastname@example.org
Contact person: Mr. Krishna Kumar, Director
INSIDER TRADING POLICY
As per the SEBI Guidelines on Insider Trading, all listed companies were required to set up an appropriate mechanism for regulating transactions in the shares of the Company by insiders. Your company has framed a Code of Conduct for prevention of Insider Trading for Promoters, Directors, Designated Employees & their dependant family members. Mr. M.Arumugam, Company Secretary has been appointed as the Compliance Officer for monitoring insider trading.
Information pursuant to Clause 49(VIII)(E) of the Listing Agreement:
The necessary information are provided in the notice, calling the Annual General meeting
CEO / CFO Certification:
As required by Clause 49 of the Listing Agreement, the CEO / CFO Certification is provided in the Annual Report.
EXTENT OF COMPLIANCE WITH NON-MANDATORY REQUIREMENTS:
Circulation of Quarterly / Half-yearly results:
The quarterly / half yearly results are sent to shareholders who request for the same.
The auditors' have not made any qualifications on the financial statements of the Company.
During the year no resolutions were passed by postal ballot.
Training of Board Members and their evaluation
Majority of the Board members have been associated with the Company for a number of years and are well aware of the business model of the company as well as the risk profile of the business parameters of the company, their responsibilities as directors, and the best ways to discharge them.
Whistle Blower Policy
The company has put in place a mechanism of reporting illegal or unethical behaviour. Employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate supervisor / notified persons.
The reports received from any employee will be reviewed by the audit committee. It is affirmed that no person has been denied access to the audit committee in this respect. The Directors and senior management are to maintain confidentiality of such reporting and ensure that the whistle blowers are not subjected to any discriminatory practice.
P. MANIVANNAN Whole Time Director
MANIKAM RAMASWAMI Managing Director
Date: 28th May 2015