29 Apr 2017 | Livemint.com

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Last Updated: Mar 31, 03:54 PM
Nocil Ltd.

BSE

  • 93.85 3.25 (3.59%)
  • Vol: 616151
  • BSE Code: 500730
  • PREV. CLOSE
    90.60
  • OPEN PRICE
    91.20
  • BID PRICE (QTY.)
    93.85(2749)
  • OFFER PRICE (QTY.)
    0.00(0)

NSE

  • 93.80 0.00 (0%)
  • Vol: 2595777
  • NSE Code: NOCIL
  • PREV. CLOSE
    93.80
  • OPEN PRICE
    91.15
  • BID PRICE (QTY.)
    93.80(10338)
  • OFFER PRICE (QTY.)
    0.00(0)

Nocil Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

1. Company's philosophy on Corporate Governance

The Company's policy on Corporate Governance is based on the principles of full disclosure, fairness, equity, transparency and accountability in the various aspects of its functioning, leading to the protection of the stakeholders' interest and an enduring relationship with stakeholders. The Management's commitment to these principles is reinforced through the adherence of all Corporate Governance practices which now forms part of the Regulation Nos. 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 ['Listing Regulations'] which has replaced the erstwhile Listing Agreement effective 1st December 2015. The Company has also adopted the Code of Conduct for the Directors and senior management personnel. The Company has in place a Code for Fair Disclosure and Conduct as required under the SEBI (Prohibition of Insider Trading) Regulations, 2015.

2. Board of Directors

The Company's Board of Directors comprises of both Independent and Non-Independent Directors. The Company also has one woman Director on its Board. The number of Independent Directors comprises of more than 50% of the total strength of the Board. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations.

The management of the Company is entrusted in the hands of the Key Management Personnel of the Company and is headed by the Managing Director who functions under the supervision and control of the Board. The Board reviews and approves strategy and oversees the actions and results of management to ensure that the long term objectives of enhancing stakeholders' value are met.

Mr. Hrishikesh A. Mafatlal, Chairman and Mr. Vishad P. Mafatlal, Director belong to the promoter group and are related to each other. Mr. C.R. Gupte, Managing Director and Mr. Vilas R. Gupte, Director are related to each other. None of the Directors are related to each other, other than as stated above.

None of the Independent Director has any other material pecuniary relationship or transaction with the Company, its Promoters, or Directors, or Senior Management which, in their judgment, would affect their independence.

The Board of Directors comprises of professionals drawn from diverse field who bring with them a wide range of skills and experience to the Board which enhances the quality of Board's decision making process.

The broad composition of the Board of Directors and other details such as their total number of Directorship / Committee positions viz., Chairman/ Member, shareholding in the Company and attendance at the Board Meetings and at the last Annual General Meeting are as under

The Company has clearly defined the roles, functions, responsibility and accountability of the Board of Directors. In addition to its primary role of monitoring corporate performance, the major functions of the Board comprise:

• Approving corporate philosophy;

• Formulating strategic and business plan;

• Reviewing and approving financial plans and budgets;

• Monitoring corporate performance against strategic and business plans;

• Ensuring ethical behavior and compliance with laws and regulations;

• Reviewing and approving borrowing limits.

Dates for the Board Meetings in the ensuing year are decided well in advance and communicated to the Directors. Board Meetings are held at the Registered Office of the Company. The Agenda along with the Notes are sent in advance to the Directors. Additional Meetings of the Board are held when deemed necessary by the Board. As required by Secretarial Standards, certain Unpublished Price Sensitive Information (UPSI) such as Unaudited / Audited Financial Results with Presentation thereon is being circulated to the Board Members at a shorter Notice as per the general consent given by the Board of Directors at the first Board Meeting held at each financial year.

The Fifty Third Annual General Meeting was held on 23 July  2015.

Pursuant to requirements of Regulation 26 of the Listing Regulations, none of the Company's Director is a member of more than 10 committees or Chairman of more than 5 committees across all Public companies in which he is a Director.

Familiarization Programme

Periodically, the Company provides familiarization programme to the Independent Directors to enable them to understand the business of the Company. At the meetings of the Board of Directors held on quarterly basis, presentations on the Manufacturing, Marketing, financial and technical operations are made. Moreover, the Management has also endeavored to apprise the Directors regarding their responsibilities under the new Listing Regulations vis-a-vis those contained in the erstwhile Listing Agreement. The details of the familiarization programme has been displayed on the Company's website and its weblink is <http://www.nocil.com/images/fckeditor/file/> Familiarization-Programme-for-IDS.pdf.

. Audit Committee

The total strength of the Audit Committee is 5 out of which, 4 members fall under the Independent Category. The norms require 2/3rd of the members to be independent directors. The scope of the activities of the Audit Committee is as set out in Regulation 18 of the Listing Regulations read with Section 177 of the Companies Act, 2013.

The terms of reference of the Audit Committee are broadly as follows:

a) To oversee the Company's financial reporting process and the disclosure of its financial information to ensure that financial statement is correct, sufficient and credible;

b) To engage consultants who can analyse / review the internal practices and give a report thereon to the audit committee from time to time in respect of the Company's Financial Reporting and controls thereto;

c) the recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

d) to recommend the appointment of the Cost Auditor and review the Cost Audit Report.

e) review and monitor the auditor's independence and performance, and effectiveness of audit process;

f) examination of the financial statement and the auditors' report thereon;

g) approval or any subsequent modification of transactions for the Company with related parties;

h) scrutiny of inter-corporate loans and investments;

i) valuation of undertakings or assets of the Company, wherever it is necessary;

j) evaluation of internal financial controls and risk management systems;

k) To review the Internal Control over Financial Reporting.

l) Monitoring the end use of funds raised through public offers and related matters.

Mr. C.L. Jain, is the Chairman of the Audit Committee and was present at the Annual General Meeting held on 23 July 2015.

Audit Committee Meetings are also attended by the Chairman, Managing Director, Deputy Managing Director, Chief Financial Officer and Company Secretary. The Company Secretary acts as the Secretary of the Audit Committee.

The Board of Directors has appointed M/s. Aneja Associates, Chartered Accountants, as Internal Auditors to conduct the internal audit of the various areas of operations and records of the Company. The periodical reports of the said internal auditors were regularly placed before the Audit Committee along with the comments of the management on the action taken to correct any observed deficiencies on the working of the various departments.

The Audit Committee also assures the Board about the adequate internal control procedures and financial disclosures commensurate with the size of the Company and in conformity with the requirements of the new Listing Regulations.

4. Share Transfer Committee

The present members of the Committee are Mr. H.A. Mafatlal, Chairman, Mr. C.R. Gupte, Managing Director and Mr. Vishad

P. Mafatlal.

The Committee approves cases such as the transfer of shares in physical form, issue of duplicate share certificates and requests regarding Transmission / Consolidation /Split of Share Certificates etc. The Committee normally meets once in a week to approve the share transfers and other related matters and reports the same by circulation of Minutes to the Board. The Company's Registrar and Share Transfer Agents verifies transfer deeds and other related documents of cases of Transmission / issue of Duplicate Share Certificates and recommends the same for approval of the Committee. Further, as per Regulation 40 (2) of the Listing Regulations, a report on transfer of shares / deletion of name/ issue of duplicate share certificate/ transmission of securities is also placed at each meeting of the Board of Directors.

Stakeholders Relationship and Committee

Grievance

The Company has constituted the Stakeholders Relationship and Investors' Grievance Committee in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations (erstwhile Listing Agreement). Mr. Rohit Arora is the Chairman and Member of the Committee and was present at the Company's Annual General Meeting held on 23rd July 2015.

The Committee meets as and when the need arises. The Committee reviews the complaints received by the Company from its investors and the action taken by the management to sort out these complaints. The Minutes of the Committee meeting are circulated to the Board of Directors.

The Company received 6 complaints from shareholders in Financial Year 2015-16. Except one complaint, all the other complaints were resolved to the satisfaction of the investors.

The Committee meets as and when the need arises. The Committee reviews the complaints received by the Company from its investors and the action taken by the management to sort out these complaints. The Minutes of the Committee meeting are circulated to the Board of Directors.

The Company received 6 complaints from shareholders in Financial Year 2015-16. Except one complaint, all the other complaints were resolved to the satisfaction of the investors.

The pending complaint was also resolved by the Company on

7th April 2016.

The Company Secretary acts as the Secretary of the Committee.

Nomination and Remuneration Committee

The broad terms of reference of the Nomination and Remuneration Committee (NRC) are as follows:

a. Appointment / re-appointment of Managing Director / Deputy Managing Director.

b. Review the performance of the Managing Director / Deputy Managing Director after considering the Company's performance.

c. Recommend to the Board remuneration including Salary, Perquisites and Performance Bonus to be paid to the Company's Managing Director / Deputy Managing Director.

d. Review of the Remuneration Policy of the Company in line with market trends to attract and retain the right talent.

e. Review and approval of revision in remuneration of Top Management Executives of the Company.

f. Grant of Employees Stock Options to Designated Employees.

g. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees.

h. Formulation of criteria for evaluation of Independent Directors and the Board.

i. Devising a policy on Board diversity.

j. 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 their appointment and removal. The Company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

During the year two NRC Meetings were held on 30 April 2015 and 29 March 2016.

The performance of each Independent Director is evaluated by the entire Board of Directors (in the absence of the director being evaluated) on the basis of engagement, leadership, analysis, decision making, communication, governance, interest of stakeholders etc.

7. Remuneration Policy

The Nomination and Remuneration Committee while deciding the remuneration package of the Directors and Senior Management Executives ensures that:

i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

iii) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

The Non-Executive Directors (NEDs) are paid remuneration by way of Sitting Fees and Commission. In terms of the Shareholders' approval obtained at the Annual General Meeting held on 30 June 2014, the Commission is paid at a rate not exceeding 1% per annum of the profits of the Company computed in accordance with Section 197 and 198 of the Companies Act, 2013. The distribution of Commission amongst the NEDs is placed before the Board and distributed as mutually decided by the Board

8. Remuneration of Directors

During the financial year 2015-16, 3,06,700 and 3,22,000 Stock Options were granted to Mr. C.R. Gupte and Mr. S.R. Deo respectively. The Nomination and Remuneration Committee in its meeting held on various dates so far granted in aggregate 16,52,700 Stock Options to Mr. C.R. Gupte, Managing Director and 8,59,400 Stock Options to Mr. S.R. Deo, Deputy Managing Director under Employees Stock Options Scheme. Stock Options are issued at exercise price being the closing price of equity shares on Bombay Stock Exchange Limited for the previous day of date of grant. The exercise period would commence one year from the date of grant and will expire on completion of ten years from the date of grant of options. Till date, Mr. C.R. Gupte and Mr. S.R. Deo have not exercised any Stock Options.

The existing term of appointment of the Managing Director is expiring on 31st July 2017. The appointment of Deputy Managing Director is for a period of four years from 1st April 2015. Both the appointments may be terminated by either party giving six months notice in writing or the Company paying six months salary in lieu thereof.

9. Corporate Social Responsibility (CSR) Committee

The terms of reference of the Corporate Social Responsibility (CSR) Committee broadly comprises :

- To review the Company’s existing CSR Policy and to supervise and monitor the activities undertaken by the Company as specified in CSR Policy and Schedule VII of the Companies Act, 2013.

- To provide guidance on various CSR activities undertaken by the Company.

10 Policy on Related Party Transactions

In terms of Section 188 of the Companies Act, 2013 read with the Clause 49 of the erstwhile Listing Agreement, (now Regulation 23 of Listing Regulations) the Company had formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. During the year under review, the said Policy was modified so as to align the same with the Companies (Meetings of the Board and its Powers) Second Amendment Rules, 2015.

The Policy is intended to ensure that there is proper approval and reporting of transactions between the Company and its related parties. The modified Policy is placed on the website of the Company viz., www.nocil.com

11. Policy on Board Diversity

This Policy aims to set out the approach to achieving diversity for the Board of Directors of the Company.

The Company believes that benefits of a professional board that possesses a balance of skills, experience, expertise will enhance the decision making power of the Board which in turn will benefit the stakeholders of the Company.

12. Vigil Mechanism / Whistle Blower Policy

The Company has adopted an ethical code of conduct for the highest degree of transparency, integrity, accountability and corporate social responsibility. Any actual or potential violation of the Code would be a matter of serious concern for the Company. The Directors, Employees or any person dealing with the Company can play an important role in pointing out such violations of the code.

Accordingly, this policy has been formulated with a view:

- To provide a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit Committee; or Managing Director who is nominated by the Audit Committee, any instance of unethical behaviour, actual or suspected fraud or violation of the Company's Ethics Policy.

- To safeguard the confidentiality and interest of such employees / other persons dealing with the Company against victimization; who notice and report any unethical or improper practices, and

- To appropriately communicate the existence of such mechanism, within the organization and to outsiders.

To meet the objective of the Policy a dedicated e-mail Id -vigilmechanism@nocil.com has been activated.

The Policy has been posted on the website of the Company.

No personnel has been denied access to the Chairman of the Audit Committee or Managing Director in respect of reporting any of the above instances.

13. Policy on Subsidiary Companies

In terms of the conditions/requirements of Clause 49 of the erstwhile Listing Agreement, the Company has adopted the policy of subsidiary companies with specific reference to materially listed and unlisted subsidiary companies and the policy to be followed in such eventualities. As a matter of information, as on date, the only wholly owned subsidiary Company viz. PIL Chemicals Ltd is not falling under the category of Materially Unlisted Subsidiary Company in terms of the definition under Regulation 24 of the Listing Regulations (Clause 49 of the erstwhile Listing Agreement). The Policy for determining the material subsidiaries is available at <http://> www.nocil.com/images/fckeditor/file/Policy-on-Material- Subsidiaries.pdf.

14. Independent Directors' Meeting

During the year under review, the Independent Directors met on 26 January, 2016, inter alia to discuss :

- Corporate and Board Meeting Structure.

- Board Effectiveness and Performance Evaluation.

- Other operational issues.

All the Independent Directors were present at the meeting.

15. Means of communication

During the period 1st April 2015 to 30th November 2015, the financial results were presented and published by the Company in the format as prescribed under Clause 41 of the erstwhile Listing Agreement. Effective 1st December 2015, the Listing Agreement executed with the Stock Exchanges, has been replaced by Listing Regulations. Consequent to the new Listing Regulations coming into force, the Board takes on record the Audited / Unaudited yearly / quarterly financial results in the format prescribed under Regulation 33 of the Listing Regulations read with Circular (Ref No. CIR/ CFD / CMD/ 15/2015 dated 30th November 2015) issued by SEBI within prescribed time limit from the closure of the quarter / year and announces the results to all the stock exchanges  where the shares of the Company are listed. The Audited / Unaudited yearly / quarterly financial results are also published in the shortened format as prescribed by SEBI in the above mentioned Circular in the Economic Times and Maharashtra Times within 48 hours of the conclusion of the meeting of the Board in which they are approved.

I. The quarterly results are submitted to the Statutory Auditors of the Company for a limited review and the report of the Auditors is also filed with all stock exchanges after it is approved by the Board of Directors.

II. The quarterly results are not sent to each shareholder as shareholders are intimated through press.

III. The Company's website www.nocil.com provides information about the Company to its existing and prospective stakeholders. The quarterly results are displayed on the Company's website along with other relevant information.

IV. In line with the erstwhile Listing Agreement, the Company has created a separate e-mail address viz. investorcare@nocil.com to receive complaints and grievances of the investors.

16. Management Discussion and Analysis forms a part of this Annual Report

17. Compliance Officer

Mr. V.K. Gupte, Company Secretary is the Compliance Officer of the Company.

19. Disclosures

A. Disclosure on materially significant related party transactions that may have potential conflict with the interest of the Company at large :

• The Company does not have any related party transaction, which may have potential conflict with the larger interests of the Company. The disclosures of normal course of business are given in the Notes to Accounts.

B. Details of non-compliance by the Company, penalties, strictures imposed on the Company by the Stock Exchange or SEBI or any other statutory authority on any matter related to capital markets, during the last three years:

• There were no instances of non-compliance of any matter related to the capital markets during the last three years and the Company has complied with the requirements of regulatory authorities on capital markets.

C. Details of compliance with mandatory requirements:

• All the mandatory requirements of Clause 49 of the erstwhile Listing Agreement and Regulations 17 to 27 of the Listing Regulations have been complied with by the Company.

20. Declaration of compliance with the Code of Conduct / Ethics:

In compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated a Code of Conduct for prohibition and prevention of Insider Trading for its designated employees. The code lays down Guidelines and procedures to be followed and disclosures to be made while dealing with equity shares of the Company.

All the Directors and Senior Management have affirmed compliance with the Code of Conduct / Ethics as approved and adopted by the Board of Directors.

21. General shareholders' information

i) Registered Office : Mafatlal House, H.T. Parekh Marg,  Backbay Reclamation, Mumbai-400 020.

ii) Annual General Meeting:

Date and time : 27 July 2016 at 2.30 p.m.

Venue : Rama & Sundri Watumull Auditorium  K.C. College,Vidya Sagar, Principal K.M. Kundnani Chowk, 124, Dinshaw Wacha Road, Churchgate, Mumbai - 400 020.

iii) Financial Year of the Company

The financial year covers the period 1 April to 31 March.

Financial reporting for FY 2016-17 (Indicative): Quarter ending on June 2016 : 27 July 2016

Half year ending on September 2016 : 26 October 2016

Quarter ending on December 2016 Year ending on March 2017

Annual General Meeting (2016-17)  end of January 2017 end of April/May 2017 end of July, 2017

iv) Date of Book Closure

Thursday, 21 July 2016 to Wednesday, 27 July 2016

v) Dividend Payment Date

On or after 2 August 2016 ( If declared at forthcoming Annual General Meeting)

vi) Listing of Equity Shares on Stock Exchanges and Stock Code

Equity shares of the Company are listed on

1. Bombay Stock Exchange Limited

(Stock Code: 500730)

2. National Stock Exchange of India Limited

(Stock Code: NOCIL

The Company has paid the Listing Fees to Bombay Stock Exchange Limited and National Stock Exchange of India Ltd for FY 2016-17.

vii) Demat information

The shares of the Company were brought under compulsory demat mode with effect from 29 May 1999. As on 31 March 2016 about 97.09 % shareholding representing 15,61,02,062 shares of the Company have been converted into demat form. The Company has executed agreements with both NSDL and CDSL for demat of its shares.

ISIN numbers in NSDL and CDSL for equity shares : INE 163A01018

ix) NOCIL Stock Performance in comparison to BSE Sensitive Index and NSE Nifty

x) Registrar and Share Transfer Agents:

The Company had appointed Sharepro Services (India) Pvt Ltd ['Sharepro'] as its Registrar and Transfer Agents (RTA) for the last 16 years. On the complaint received from some of the listed companies who were the clients of Sharepro in respect of certain irregularities at the functioning at the office of Sharepro, SEBI has vide its order dated 22 March 2016 restrained Sharepro from carrying on any capital market activity with immediate effect. SEBI has amongst others advised the companies to switch over to another RTA.

In line with the SEBI's Order, the Company has appointed Karvy Computershare Private Limited effective from 23rd May  2016 as the RTA.

The Management wishes to reassure each one of the members that the interests of shareholders would be kept in mind and would be of top most priority and will ensure that the transition happens with least discomfort to the shareholders

xiii) Outstanding ADRs/GDRs/Warrants or any Convertible instruments, conversion date and likely impact on equity.

The Company has not issued any ADRs/GDRs/Warrants or any Convertible instruments.

xiv) Foreign Exchange Risk and Hedging activities:

Risk of exchange rate volatility is mitigated by effecting the imports payments out of the Export Earnings in Foreign Currency. The Company enjoys a natural hedging through the EEFC Account and in case of surplus, the same is adjusted against spot rate / forward rate as may be decided by the Management at the relevant point of time.

xv) Plant locations:

Navi Mumbai : C-37, Trans Thane Creek Industrial Area Off Thane Belapur Road, Navi Mumbai - 400 705 – Maharashtra Tel. Nos. : 022 – 66730551 – 4

Dahej : Plot No. 12/A/1 and 13/B/1, G.I.D.C.  Dahej, Village-Ambheta, Tal. Vagra Dist. Bharuch – Gujarat Tel. Nos.: 02642 – 399200

xvi) Address for Investor correspondence

For the Financial Year 2015-16:

Sharepro Services (India) Pvt. Ltd., 13 A-B,Samhita Warehousing Complex, Sakinaka Telephone Exchange Lane,Off Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai – 400 072. Telephone Nos : 022-6772 0300, 67720400Fax nos : 022-28591568 / 28508927 Email : sharepro@shareproservices.com

Note: From 23 May 2016

Karvy Computershare Pvt. Ltd.

Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad – 500 032. Telephone Nos : 040 – 6716 2222 Fax nos : 040 - 2343 1551 Email : nocil.ris@karvy.com

Investors’ Relation Centre

24 B, Rajabahadur Mansion, Ground Floor, Ambalal Doshi Marg, Mumbai, Maharashtra 400023. Telephone No. : 022-66235454