REPORT ON CORPORATE GOVERNANCE
1. Company's Philosophy on the Code of Governance
The Company firmly believes in following the best standards of business practices and ethics to conduct its operations and follows the principle of transparency, integrity, accountability and equity while dealing with its shareholders, lenders, employees, government, other stakeholders and society at large. The Company's philosophy on Corporate Governance is in line with the requirements of Clause 49 of the Listing Agreement with Stock Exchange. The Company has professionals on its Board of Directors who are actively involved in the deliberations of the Board on all important policy matters.
The Company's Governance framework is based on the following principals.
a) Appropriate Composition of Board of Directors with each members having expertise in their domain.
b) Timely disclosure of material, operational, and financial information to the stakeholders.
c) Proper business conducted by the Board and Senior Management.
2. Code of Conduct
In tune with the corporate philosophy stated in the preceding para, the Board of Directors of the Company has laid down a Code of Conduct for all the Board Members and Senior Management of the Company in terms of the requirement placed in Clause 49 of the Listing Agreement. All Independent Directors are bound by duties of Independent Directors as set out in the Companies Act, 2013 read with schedule IV and rules thereunder. The Code of Conduct is displayed at Company's website www.reliancechemotex.com under the head "Code of Conduct". Affirmation regarding Compliance with the Code of Conduct has been obtained from all the Board Members and Senior Management Personnel of the Company.
3. Code for Prevention of Insider Trading
The Company has adopted a code of conduct for Prevention of Insider Trading ("the code") in accordance with the requirement of SEBI (Prohibition of Insider Trading) Regulation 1992. The SEBI has introduced various amendment to the Insider Trading Regulations of 1992 which order new action steps by the Corporate and other market Intermediaries. The Code is amended from time to time reflecting the changes brought by SEBI. The Code is applicable to promoters and promoters group, all directors and such designated employees who was expected to have access to unpublished price sensitive information relating to the Company. The Company has also adopted the new code for prevention of Insider Trading Regulation (SEBI PIT) Regulation, 2015 and the Board of Directors has confirmed the same in its meeting held on 30th March, 2015. The Company Secretary is the Compliance Officer for monitoring adherence to the said Regulation.
4. Board of Directors
The Company has a balanced combination of Executive and Non - Executive Directors in terms of the Companies Act, 2013 and the Listing Agreement. As on 31st March, 2015 Company's Board comprises of eleven directors out of which three are Non-Executive Directors and four are Independent Directors. Shri Shankar Menon, Independent Director has been elected as Chairman of the Company in the meeting of Board of Directors held on 10th February, 2015. Smt Dipika Shorff, appointed as Additional Director (Women Director) and including Chairman there are four independent director which is sufficient compliance of listing agreement. All the Independent Directors have met the independence criteria as mentioned under clause 49 of the listing agreement. Directors of Company are not member in more than ten committees or act as Chairman of more than five committees across all companies in which he is a director.
(ii) Number of Board Meetings held and their dates of holding
Six Board Meetings were held during the Financial Year 2014-2015 at the following dates 30.05.2014, 09.08.2014, 31.10.2014, 17.01.2015, 10.02.2015 & 30.03.2015 respectively. The maximum time gap between any two consecutive meetings was less than one hundred and twenty days as prescribed in the Listing Agreement and the Companies Act, 2013. The attendance at the Board Meetings during the year, at the last Annual General Meeting and other details regarding other Directorship in Indian Public Companies etc are as follows
• For the purpose of reckoning the limit under Clause 49 D of Listing Agreement, we have consider the Chairmanship/ Membership of Audit Committee & Stakeholder Relationship Committee.
• Shri V.B.L Mathur & Shri Basant Kumar Agarwal, Independent Directors of the Company has resigned from the Board on 06.02.2015 & 31.03.2015 respectively.
• Chairmanship/Membership of Committees other than Reliance Chemotex Industries Limited.
• During the year, the Company provides the information as set out in Annexure X to Clause 49 of Listing Agreement to the Board and Committees thereof to the extent it is applicable and relevant information as part of Agenda Paper.
• Shri N.G Khaitan & Shri Rahul Shroff who were longest in the office are due for retirement by rotation at this annual general meeting and are eligible for re-appointment.
• Disclosure regarding appointment and re-appointment of Directors/ Additional Directors
Brief Profile of Retiring Directors.
• Shri N.G Khaitan, Non-Executive & Not Independent Director of the Company. He is a Solicitor. He is also a senior partner of M/s. N.G Khaitan & Co. He has more than 35 Year of Experience in Business & Industry. He is associated with the Company since 1977 and also acted as Independent Director in various companies. Details of holding of Chairmanship or member in the committee given in Corporate Governance Report.
• Shri Rahul Shroff, Executive Director of the Company since 01st August, 2010. He is an Engineer graduate from MIT Cambridge, USA. He is responsible for day to day affairs of the Company since his appointment and has substantial power under supervision, control, directions of Managing Director. He is also responsible to increase the Sales of our product in overseas market. He is always take initiate to explore new overseas market for our product. He is also play a vital role in the Production Department. Details of holding of Chairmanship or member in the Committee given in Corporate Governance Report.
Brief Profile of Additional Director
• Mrs. Dipika Shroff, Additional Director of the Company from 10th February, 2015. She has a Bachelor of Arts in Economics and Sociology and a Minor in Political Science from St. Xavier's College, Mumbai University. She has been involved in the manufacture and export of silk fabrics for fashion and home textiles for the last twenty five years. Detail of her Chairmanship/ Committee are given in Corporate Governance Report.
Board Independence: The Non-Executive Independent Directors fulfill the conditions of independence specified in Section 149 of the Companies Act, 2013 and rules made thereunder and meet the requirement of Clause 49 of the Listing Agreement entered with the Stock Exchange. Format Letter of Appointment of Independent Directors uploaded on website of the Company.
Familiarization Programme for Directors : At the time appointing a Director, a formal letter of appointment is given to him/her which interalia explain role, function, duties and responsibilities expected of him/her as director of the Company. The Director is also explained in details the Compliances required from him/her under the Companies Act, 2013. Clause 49 of Listing Agreement and other relevant regulation and affirmation taken with respect to the same. The Managing Director also has one to one discussion with the newly appointed directors to familiarize with the Company and its operations. The Company has put the Familistarion programme on website of the Company www.reliancechemotex.com .
5. Committees of the Board
The Board of Directors have constituted Board Committees to deal with specific area and activities which concern the Company and need a closer review. The Board Committees are framed with the approval of Board and function their respective area. The Board Committees play a vital role in the management of day to day affair and governance of the Company. The Board of Directors has Constituted Eight Committees of the Directors with adequate delegation of powers to discharge urgent business of the Company. These Committees are (a) Audit Committee (b) Stakeholder Relationship Committee (c) Nomination & Remuneration Committee (d) Finance Committee (e) Corporate Social Responsibility committee (f) Risk Management Committee (g) Management Committee h) Share Transfer Committee.
a) Audit Committee
(i) Terms of reference
Audit Committee was constituted in terms of reference as contained in the Clause 49 of the Listing Agreement with the Stock Exchanges and comply with the provision Section 177(1) of Companies Act, 2013.
The terms of reference of Audit Committee include inter-alia appointment of cost auditor, systematic review of Accounting Policies & practices, financial reporting process, adequacy of internal control systems and internal audit function, quarterly/ half-yearly financial statements and risk management policies, approval of related party transaction. It also recommends appointment of Statutory Auditors and Internal Auditors and fixation of audit fees and discussion on audit reports and other function are according to the Statutory and regulatory requirements. The Minutes of meetings of the Audit Committee are circulated to members of the Committee and the Board.
(ii) Composition of Audit Committee
Shri V.B.L Mathur, Chairman of Audit Committee had resigned w.e.f 06.02.2015 and Shri K.L Sonthalia have been appointed as Chairman of the Audit Committee w.e.f 10.02.2015. The Committee Comprises of 4 Non-Executive Directors with Independent Directors forming a majority who have requisite Financial and Management expertise. The Statutory Auditors, Internal Auditors, Cost Auditors, Managing Director and CFO are being invited to the meetings. Shri Vimal Tank,Company Secretary is the Secretary of the Committee.
The Audit Committee in its meeting held on 09.08.2014 authorized Shri K. L. Sonthalia to present at the AGM as the Deemed Chairman of the Audit Committee as Shri V.B.L.Mathur was scheduled to be in abroad on the said date.
The meetings of the Audit Committee during the year were held on the following dates: 30.05.2014, 09.08.2014, 31.10.2014 & 10.02.2015.
Internal Control : The Company has appointed a Firm of Chartered Accountant as Internal Auditors to review and report on the Internal Control Systems of the Company. The Report of the Internal Auditors is reviewed by the Audit Committee. The Audit Committee formulates a detailed plan to the Auditors for the year and the same is reviewed at the Audit Committee Meeting.
(b) Stake Holder Relationship Committee
(i) Terms of reference
The Committee has been constituted as per provisions as set out in the Listing Agreement and the Companies Act, 2013 and specifically look into the redressing of Shareholders' and Investors' complaints in respect to Dematerialization of Shares, Issue of Duplicate Share Certificate, Non-receipt of Balance Sheet, and Non-receipt of declared Dividends etc. Minutes of meetings of the Stakeholder Relationship Committee are circulated to members of the Committee and the Board.
(ii) Composition of Stakeholder Relationship Committee
The Committee comprises of 1 (one) Non-executive Director, Vice Chairman & Managing Director and Whole Time Director. Shri Vimal Tank,Company Secretary is the Compliance officer of the Committee.
The Committee held its meetings during the year on following dates: 30.05.2014, 09.08.2014, 31.10.2014 & 10.02.2015.
(iii) Transfer of Shares:
To expedite the process of Share transfers the power of Share transfer has been delegated to the Share Transfer Committee. The Board of Directors in its meeting held on 09th August, 2014 constituted the Share Transfer Committee with Shri Sanjiv Shroff, Shri Rahul Shroff & Shri R.N Sharma. There were no transfer of shares pending for registration for more than 15 days The Company Secretary is the Secretary of the Meeting. During the year share transfer committee meeting held on Eight times, to transact the transfer of shares. The Company Secretary of the Company regularly interact with Share Transfer Agents, to expedite the process of
Transfer of Shares.
(iv) Investors Complaints received and resolved during the year
The Company has received 12 letters/complaints from Investors which have been resolved during the year. There was no complaint remained unresolved as on 31st March, 2015. The Company has not received any complaints through SCORE during the year and as per current status as on 31.03.2015, No Complaint were pending.
(c) Nomination & Remuneration Committee
The Company has constituted a Nomination & Remuneration Committee for approval of the remuneration payable to the managerial persons with reference to provisions of Schedule V of the Companies Act, 2013, Clause 49 of the listing agreement and within the ceiling fixed by the Shareholders. The Company has approved the Nomination & Remuneration Policy in the Meeting of Board of Directors held on 09th August, 2014 and posted on the Company website www.reliancechemotex.com . The Company has also re- constituted the Committee in the Meeting of Board of Directors held on 10th February, 2015 with following persons namely Shri Shanker Menon, Shri K.L Sonthalia, Shri Ramadoss Srinivasan. Shri K.L Sonthalia is the Chairman of the Committee. The committee has following terms of reference:
To lay down criteria and terms and conditions with regard to identifying Persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
• To determine remuneration based on the Company's size and financial position and trends and practices on remuneration prevailing in peer companies, in the Textile Industry.
• To carry out evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.
• To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company's operations.
• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
• The committee met two times during the year on 09th August, 2014 and 10th February, 2015.
Shri Shankar Menon waived the sitting fees of Committee Meeting held on 09.08.2014.
The Committee held a Meeting on 09th August, 2014 to re-appoint Shri Sanjiv Shroff as Vice Chairman & Managing Director of the Company for a further period of three years w.e.f. 1st September, 2014 and recommendation made to Board of Director for Appointment of Shri Ravindra Kala, CFO & Shri Vimal Tank,Company Secretary w.e.f from 09th August,2014. The Committee also held a meeting on 10.02.2015 for appointment of Smt. Dipika Shroff, as Additional Director in the Board.
Remuneration Policy: The Board of Directors in its meeting held on 09th August, 2014 has approved the Policy on Nomination & Remuneration. The Detailed policy as per requirement of Listing Agreement are posted on Company's website www.reliancechemotex.com .The details of remuneration paid to Executive Directors and Non-Executive Directors are as follow :
Details of remuneration paid to Executive Director for the year 2014-2015.
ii) Non- Executive Director: The Non-Executive Directors are paid remuneration by way of sitting fees. The Non-Executive Directors are paid sitting fees for each meeting of Board or Committee of Directors attended by them. The Non- Executive Directors do not have any material pecuniary relationship or transaction with the Company.
Appointment Criteria and qualification
The Committee shall identify and ascertain the integrity, qualification, expertise, and experience of the person for appointment as directors in terms of Nomination & Remuneration policy of the Board and recommend to the Board for his/her appointment. For the appointment of KMP (other than Managing Director/ WTD) or Senior Management, a person should possess adequate qualification, expertise and experience for the position he/she is considered for the appointment. Further, for administrative conveninance, the appointment of KMP (other than MD & WTD) or Senior Management, the Managing Director is authorized to identify and appoint a suitable person for such position. However, if the need be, the Managing Director may consult with the Committee / Board for further guidance/ direction.
The Committee carry out evaluation of performance of every director on annual basis.
The Committee has identify evaluation criteria which will evaluate directors based on knowledge to perform the role, time & level of participation, performance of duties, level of oversight, professional conduct and independence. The Appointment / Re- Appointment, continuation of Directors on the Board shall be subject to the outcome of the yearly evaluation process.
Evaluation Criteria for Independent Directors: The Committee formulated the evaluation criteria for the Board and the Independent Directors which shall be broadly based on:
1. Knowledge to perform the Role
2. Time & level of Participation
3. Performance of Duties and level of oversight
4. Professional conduct and independent.
d) Finance Committee
The Company has constituted a Finance Committee comprising Shri Sanjiv Shroff, Shri Rahul Shroff and Shri K.L Sonthalia as member for approval of the financial decision, and acceptance of sanction, to execute the required documents in respect of loan / limits granted by Banks. The Finance Committee Meeting held on 16.04.2014, 09.07.2014 & 24.07.2014.
e) Corporate Social Responsibility Committee
In terms of requirements of Section 135 of the Companies Act, 2013 and rules issued there under, the Board of Directors of your Company has constituted a CSR Committee comprising of Shri K.L Sonthalia, Shri R.N Sharma, Shri Rahul Shroff as members of the committee in its board meeting held on 30th May, 2014. This Committee is responsible for formulating and monitoring the CSR Policy of the Company. Further the CSR Committee Meeting held on 10.02.2015 approved the CSR expenses of Rs. 13,38,000/- in favour of Prime Minister National Relief Fund. The Company formulated the CSR Policy and uploaded the same at the Company's website
f) Risk Management Committee
During the year Company has constituted the Risk Management committee as per requirement of clause 49 of Listing Agreement and Section 177 of Companies Act, 2013. The committee comprised of members namely Shri Sanjiv Shroff, Shri Rahul Shroff, Shri Ameya Shroff and Shri R.N Sharma. Shri Vimal Tank,Company Secretary act as the compliance officer of the Committee. During the year Risk Management Committee meeting was held on 31st October, 2014, and approved the policy on risk management and details of policy was posted at the Company website www.reliancechemotex.com . The Risk Management Policy Cover the Operational Risk, Financial Risk, Compliance Risk, Hazard Risk and Employee Related Risk. Attendance of Risk Management Committee are as under.
g) Meeting of Independent Directors
As per provision of Clause 49 of Listing Agreement and Section 149 of the Companies Act, 2013. The Meeting of Independent Directors of the Company was held on 10th February, 2015 at 04.00 P.M and Shri Shanker Menon, Shri K.L Sonthalia & Shri Ramadoss Srinivasan was present in the Meeting.
During the year under review, the Independent Directors discuss the following in the Meeting.
a) Review the performance of non-independent directors and the board as whole.
b) Review the performance of the Chairperson of the Company, taking into the Accounts the views of Executive Directors and Non-Executive Directors.
c) 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.
During the Meeting Company has provided the Brief profile of the Business of the Company and also the working of Company's Managing Director, Executive Director and Whole time Director also explain their roles & responsibilities in the Company.
h) Policy on Dealing With Related Party Transaction
The Company has framed the policy on related party transaction and Audit Committee review the related party transaction in every meeting. As reviewed by the Audit Committee there is no material related party transaction during the year. As the Audit Committee in the Meeting held on 30th May, 2014 has sanctioned the omnibus approval of various transaction with related party for one year. Although during the year the Company had approved the Lease/ Leave Agreement with Indo Textile & Fibre Ltd, A.S Chemotex Private Limited, A.R Commercial Private Limited & Spell Fashions Private Limited from 01.04.2014 and taken the shareholders' approval in the Annual General Meeting held on 29.09.2014.
All proposed Related Party Transactions are reported to the Audit Committee for prior approval by the Committee in accordance with this Policy. In the case of frequent / regular / repetitive transactions which are in the normal course of business of the Company, the Committee may grant standing pre - approval, details whereof are given in a separate section of this Policy. The detail policy on related party transaction are posted on Company's website www.reliancechemotex.com .
In exceptional cases, where a prior approval is not taken due to an inadvertent omission or due to unforeseen circumstances, the Committee may ratify the transactions in accordance with this Policy.
i) During the year, there was no materially significant transactions except as set out in Note 26 of the Annual Report with the related parties viz Promoters, Directors or the Management, their subsidiaries or relatives etc. that may have a potential conflict with the interest of the Company at large.
ii) There have not been any significant changes in the accounting policies during the year.
iii) No Pecuniary relationship or transaction of the Non-Executive Directors:
There is no material transaction with any Non-Executive as well as Independent Director that require a separate disclosure.
iv ) A qualified practicing Company Secretary carried out a share capital audit to reconcile the total admitted equity share capital with the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The audit report confirms that the total issued/paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
v) No penalties or Strictures have been imposed on the Company by the Stock Exchange or SEBI or any Statutory Authority on any matter related to Capital Markets for non-Compliance by the Company during the last three years.
vi) The Company have Vigil Mechanism/ Whistle Blower Policy the same was posted on the Company website www.reliancechemotex.com . The details disclosure on the policy are elsewhere in the Board's Report.
vii) All the mandatory requirement have been appropriately complied with and the non-mandatory requirements are dealt with at the end of this report.
9. Means of Communication
The quarterly, half yearly financial results alongwith Statement of Assets and Liabilities and annual audited financial results of the Company have been sent to the Stock Exchange immediately after they are approved by the Board of Directors. The results are normally published in Financial Express (English) and Rashtradoot (Hindi).Financial Results and Shareholding Pattern are also available at Company's Website www.reliancechemotex.com .
Management Discussion and Analysis Report form part of this Annual Report are in Annexure-A.
10. General Shareholders' Information
1. Annual General Meeti ng Date, Time and Venue
26th day of September, 2015 at 10:30 AM at Alka Hotel, Shastri Circle, Udaipur (Raj.)
2. Book Closure
The Register of Members & Share Transfer Books of the Company will remain closed from 19th September, 2015 to 26th September, 2015.
3. Dividend payment date
Commencing on 2nd October 2015 and to be completed within the statutory time limit
4. Listing on Stock Exchanges and Stock Code
The Shares of the Company are listed on BSE Ltd, with the Code No. 503162
5. Registrar and Share Transfer Agent
M/s Bigshare Services Pvt. Ltd
6. Dematerialization of Shares and Liquidity
As on 31 stMarch,2015 32,63,691 of the total number of shares are in dematerialized form out of the 40,01,850 listed Equity Shares of the Company. Further 1,90,000 Equity Shares allotted on 31.03.2014 are yet to be listed at BSE Ltd, however the Company has already filed application on BSE for the listing of said shares.
7. Outstanding GDRs/ADRs/ Warrants or any Convertible Instruments, Conversion date and likely impact on equity
8. Plant Location
Village Kanpur, Post Box No. 73, Distt Udaipur -313003
9. Address for Correspondence
Reliance Chemotex Ind ustries Limited
Post Box No. 73, Village : Kanpur Dist: Udaipur -313 003 (Raj.)
Ph.No.: 0294- 2490488, 2491489, 2491490 Fax No.: 0294- 2490067
E-mail : firstname.lastname@example.org Website : www.reliancechemotex.com
Registrar & Share Transfer Agent:
M/s Bigshare Services Pvt. Ltd.
E- 2 & 3 Ansa Industrial Estate, Saki Vihar Road Saki Naka, Andheri (E), Mumbai -400 072
Ph No. 28470652, 40430200 Fax: 2847 5207
E-mail : email@example.com
b) Tentative Calendar for the Financial Year ending 31st March,2016
The tentative dates for Board Meeting consideration of quarterly financial result are as follows.
Sr. No. Particular of Quarter Tentative dates
1 First Quarter Result On or before 14th August, 2015
2 Second Quarter & Half yearly Result On or before 14th November, 2015
3 Third Quarter & Nine Months Result On or before 14th February, 2016
4 Fourth Quarter & Annual Audited Result On or before 30th May, 2016
The Company has fully complied with the applicable mandatory requirement under clause 49 of Listing Agreement.
A Secretarial Audit Report for the year 2014-15 carried out by M/s. V. M & Associates, Practicing Company Secretary Jaipur is annexed to the Directors Report and forms a part of the Annual Report.
Declaration regarding affirmation of Code of Conduct
In terms of the requirement of the amended Clause 49 of the Listing Agreement, Code of Conduct as approved by the Board of Directors of the Company has been displayed at Reliance Chemotex Industries Limited's website under the head of Code of Conduct. All the members of the Board and the Senior Management Personnel have affirmed compliance of the Code for the period ended 31st March, 2015.
Date: 08th August, 2015