CORPORATE GOVERNANCE REPORT
(In accordance with Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE),report containing the details of corporate governance systems and processes at Responsive Industries Limited is as under.)
I. Company's Philosophy on Corporate Governance
Your Company believes that sound ethical practices, transparency in operations and timely disclosures go a long way in enhancing long-term shareholders value while safeguarding the interest of all the stakeholders. It is this conviction that has led the company to make strong corporate governance values intrinsic in all operations. The Company is led by a distinguished Board, which includes independent directors. The Board provides a strong oversight and strategic counsel. The Company has established systems and procedures to ensure that the Board of the Company is well-informed and well-equipped to fulfill its oversight responsibilities and to provide management the strategic direction it needs to create long-term shareholders value.
The Company is in compliance with the requirements stipulated under Clause 49 of the Listing Agreement entered into with the stock exchanges with regard to corporate governance.
II. Board of Directors Composition:
The Board of the Company has an optimum combination of Executive and Non-Executive Directors with at least one woman director and not less than fifty percent of the Board of Directors comprises nonexecutive directors. The composition of the board is in conformity with clause 49 of the listing agreement. Details of the Directors, their directorships and committee chairmanship/membership held by them in other public companies as on March 31, 2015 (excluding Responsive Industries Limited) are as under:
2. **Only Audit Committee and Stakeholder's Relationship Committee have been considered for the purpose of the Committee positions as per listing agreement.
3. Mrs. Swati Agarwal is the spouse of Mr. Atit Agarwal. Other than this, none of the Directors have any inter-se relation among themselves.
4. Members of the Board of the Company do not have membership of more than ten Committees or Chairmanship of more than five Committees.
5. Whole- Time Director does not hold any office as an Independent Director in other listed company.
6. The details of the Directors who are being appointed/ reappointed are provided in the Notice to the Annual General Meeting. The brief profile of the Directors is placed on the website of the Company.
7. The tenure of the Independent Directors is in compliance with the Companies Act, 2013. All the independent directors have confirmed that they meet the criteria as mentioned under clause 49 of the listing agreement and Section 149 of the Companies Act, 2013.
Directors Resigned during the year:
Mr. Michael Freedman (DIN 03289409) & Mr. Vijay Kumar Chopra (DIN 02103940), Non-Executive Independent Directors of the Company has resigned from the Board w.e.f. 30th May, 2014 and 29th September, 2014 respectively.
The terms and conditions of appointment of independent directors are disclosed on the website of the Company.
During the year under review, Separate meeting of the Independent Directors was held to review the performance of Non-Independent Directors, Chairman and the Board as whole. The Independent Directors also reviewed the quality, quantity and timeliness of the flow of information between the Management and the Board and it's Committees which is necessary to effectively and reasonably perform and discharge their duties.
III. Committees of the Board
As on 31st March 2015, the Company has Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee.
1. Audit Committee
The Audit Committee is constituted as per the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the listing agreement. Members of the Audit Committee possess financial/accounting expertise/exposure.
Whole Time Director is the permanent invitee to the Audit Committee Meeting. The Audit Committee invites executives, as it considers appropriate, representatives of Statutory Auditors and Internal Auditors to present at its meetings. The Company Secretary acts as the secretary to the audit committee.
Composition, Meetings & Attendance
During the year under review, the Committee met 4 (Four) times on 30th May, 2014, 11th August 2014, 14th November 2014 and 13th February 2015.
Terms of reference: Powers of Audit Committee
• To investigate any activity within its terms ofreference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of Audit committee, inter alia, includes the following:
• Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
• Recommending the appointment, remuneration and terms of appointment of auditors of the company;
• Approving payment to statutory auditors for any other services rendered by the statutory auditors
Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
- Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013.
- Changes, if any, in accounting policies and practices and reasons for the same.
- Major accounting entries involving estimates based on the exercise of judgment by management.
- Significant adjustments made in the financial statements arising out of audit findings.
- Compliance with listing and other legal requirements relating to financial statements.
- Disclosure of any related party transactions.
- Qualifications in the draft audit report.
Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
Reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
Approval or any subsequent modification of transactions of the company with related parties; Scrutiny of inter-corporate loans and investments;
Valuation of undertakings or assets of the company, wherever it is necessary; Evaluation of internal financial controls and risk management systems;
Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
Discussion with internal auditors of any significant findings and follow up there on;
Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
To review the functioning of the Whistle Blower mechanism;
Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Review of Information by Audit Committee
• Management discussion and analysis of financial condition and results of operations;
• Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
• Management letters / letters of internal control weaknesses issued by the statutory auditors;
• Internal audit reports relating to internal control weaknesses; and
• The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.
2. Nomination &Remuneration Committee (formerly Remuneration Committee):
During the year under review, the nomenclature of Remuneration Committee was changed and it has been reconstituted as "Nomination & Remuneration Committee" to align with the requirements prescribed under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The committee comprises of non-executive directors and majority of them are independent. Chairman of the committee is an independent director.
Composition, Meetings & Attendance
During the year under review, the Committee met 5 (Five) times on 30th May, 2014, 11th August 2014, 14th November 2014, 12th December 2014 and 13th February 2015
Terms of Reference:
To identify persons who are qualified to become directors and who may be appointed in senior management level in accordance with the criteria laid down and to recommend to the Board their appointment and/or removal.
To carry out evaluation of every Director's performance.
To formulate the criteria for determining qualifications, positive attributes and independence of a Director and to recommend to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees.
To formulate the criteria for evaluation of Independent Directors and the Board. To devise a policy on Board diversity.
To deal with the matters relating to the remuneration payable to Whole time Directors, Key
Managerial Personnel and Senior Management Executives and commission, if any, to be paid to Non-Executive directors, apart from sitting fees.
To review the overall compensation policy, service agreement and other employment conditions of Whole time Directors, Key Managerial Personnel and Senior Management Executives. To deal with other matters as the Board may refer to the Nomination and Remuneration Committee ("the Committee") from time to time.
Nomination &Remuneration Policy:
The Company recognizes the competitive nature of the current market conditions and this requires the Company to provide competitive remuneration offering to directors and employees to ensure that a high caliber of staff is attracted to the Company and retained once they have gained experience. The Company further acknowledges that it can only excel in service delivery through the exceptional performance of its people and that the remuneration offering to the directors and employees plays a substantial motivational role when exceptional performance is compensated with exceptional rewards. The Remuneration of Whole time Directors, Key Managerial Personnel and Senior Executives of the Company are decided based on certain pre-determined criteria and as per the recommendation of the Committee. The Company pay remuneration to Whole time Directors, Key Managerial Personnel and Senior Executives by way of salary, perquisites, allowances (fixed component), incentives and commission (variable component) based on the recommendation of the Committee and approval of the Board of Directors and shareholders, if applicable.
Guaranteed Portion of Remuneration: Whole time Directors and employees are receiving guaranteed portion of their total package on a monthly basis.
Variable Portion of Remuneration: Incentive bonus to reward employees for exceptional performance above the accepted standard and is variable. These rewards are based on individual, departmental or Company' performance related to predefined targets. Performance is measured over a 12 months period.
Non-Executive Independent Directors are paid sitting fees for every Meeting of the Board or the Committee attended (except for Stakeholders Relationship Committee) and reimbursement of expenses, if any incurred by them. The remuneration by way of Annual Commission to the Non-Executive Independent Directors is decided by the Board of Directors on recommendation of the Committee and paid to them based on their participation and contribution at the Board / Committee meetings and the time spent on matters other than at meetings, in terms of the approval of the members by postal ballot on 24th October, 2011.
The total commission payable to the Directors shall not exceed 1% of the net profit of the Company.The Commission shall be payable on pro-rata basis to those Directors who occupy office for part of the year. The Independent Directors of the Company shall not be entitled to participate in Stock Option Scheme of the Company, if any, introduced by the Company.
The Shareholders of the Company at its meeting held on 09th August, 2014 has approved the reappointment of Mr. Atit Agarwal as a Whole-time Director of the Company for a period of 3 years w.e.f. 22nd August, 2014.
As on 31st March 2015,Mr. Atit Agarwal holds 7,73,330 equity shares and Mrs. Swati Agarwal holds 13,00,010 equity shares in the Company. Other than this, no other director by himself/herself or for any other person on a beneficial basis holds any shares in the Company. The Company has not issued any convertible instruments.
There were no pecuniary relationship or transactions of Non-Executive Directors vis-a-vis the Company.
3. Stakeholders' Relationship Committee (formerly Shareholders/Investors Grievance Committee):
During the year under review, the nomenclature of this Committee was changed from
Shareholders'/Investors' Grievance Committee to Stakeholders' Relationship Committee to align with the requirements prescribed under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Chairman of Committee is non-executive director.
Ms. Alpa Ramani, Company Secretary of the Company has been designated as Compliance Officer (Email ID: email@example.com ) for complying with the requirements of SEBI Regulations and the Listing Agreements with the Stock Exchanges.
The "SCORES" website of SEBI for redressing of Grievances of the investors is being visited at regular intervals by the Company Secretary and there are no pending complaints registered with SCORES for the Financial Year ended on 31st March, 2015.
Terms of Reference
The Committee looks into the redressal of complaints of investors such as transfer of shares, non-receipt of declared dividend/notices/annual reports, etc
4. Corporate Social Responsibility Committee
The Company has constituted a CSR Committee as required under Section 135 of the Companies Act, 2013. Your Company has developed a CSR Policy which is available on the website of the Company.
Terms of Reference
The Terms of Reference of the CSR Committee are as under:
• Formulate and recommend to the Board, a CSR Policy.
• Recommend the amount of expenditure to be incurred on CSR activities.
• Institute a transparent monitoring mechanism for implementation of CSR projects or programs or activities undertaken by the Company.
• Monitor CSR policy from time to time.
(i)Related Party Transactions
The Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in nature. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. Your Directors draw attention of the members to note no. 32 to the standalone financial statement which sets out related party disclosures and they are not in conflict with the interest of the Company at large.The Company has adopted a policy for related Party transactions which has been uploaded on the Company's website at <http://www.responsiveindustries.com/pdf/Investor-information/policies/Related-PartyTransactions->Policy.pdf
(ii) The Company has complied with the requisite regulations relating to capital markets. No Penalties/ strictures have been imposed on the Company by the Stock Exchange or SEBI or any other statutory authority on any matter related to capital market during the last three years except for the penalty imposed by the stock exchanges for delay in compliance of Clause 31 of listing agreement for the financial year ended 31.03.2014. The NSE has imposed the penalty of Rs. 5618/- (inclusive of service tax) and the penalty imposed by BSE was Rs. 3,000/-. The same has been paid by the Company.
(iii)Whistle Blower Policy
The Company has adopted whistle blower policy and has established the necessary vigil mechanism for directors and employees to report concerns about unethical behavior. No person has been denied access to the Chairman of the audit committee. The said policy has been also put on the website of the Company i.e.www.responsiveindustries.com
(iv)Details of Compliance with mandatory requirements and adoption of non- mandatory requirements
The Company has complied with the applicable mandatory requirements of Clause 49 of the Listing Agreement. The Company has adopted following non-mandatory requirements of Clause 49 of the Listing Agreement.
Adoption of Non-Mandatory Requirements
i. Shareholder Rights
As the quarterly and half yearly financial performance are published in the newspapers and are also posted on the Company's website, the same are not being sent to the shareholders.
ii. Audit Qualifications
The Company's financial statement for the financial year 2014-15 does not contain any audit qualification.
iii. Reporting of Internal Auditor
The Internal Auditor of the Company is a permanent invitee to the Audit Committee Meeting and directly inter-acts to the audit committee.
(v) Disclosure of Accounting Treatment
The Company has followed the treatment laid down in the Accounting Standards prescribed by the Institute of Chartered Accountants of India,in the preparation of financial statements. No deviation is made in following the same.
(vi)Code of Conduct
The code of conduct has been put on the Company's website. The members of the board and senior management personnel have affirmed the compliance with the Code applicable to them during the year ended March 31, 2015. The Annual Report contains declaration to this effect signed by the Mr. Atit Agarwal -Chairman & Whole Time Director of the Company.
The Company has one material non listed Indian subsidiary Company. The requirement of appointing Independent Director of the Company on the Board of Directors of the subsidiary Company has been duly complied with. All requirements of the Clause 49 of the Listing Agreement with regard to subsidiary company have been complied with.
(viii)Material Subsidiary policy
The Company has framed policy for determining "material subsidiaries" to ensure that Board of Directors has overall supervision of functioning of Subsidiaries of the Company and to provide the governance framework for such subsidiaries. The policy is available at <http://www.responsiveindustries.com/pdf/Investor-information/policies/Policy-on-Material->Subsidiaries.pdf
(ix)Certificate under Clause 49 (IX)
The certificate pursuant to the provisions of Clause 49 (IX) of the listing agreement certifying that the financial statements do not contain any materially untrue statement and these statements represent a true and fair view of the Company's affairs is annexed and forms part of the Annual Report. (x) Famili arisation programme for Directors
The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices.
VI. Means of Communication
The Board of Directors of the Company approves and takes on record the quarterly, half yearly and annual results and announces forthwith results to all the Stock Exchanges, where the shares are listed. The results are published normally in Free Press Journal and Navshakti. The results are also displayed on the Company's website at www.responsiveindustries.com The company issusues news releases on significant corporate decisions/activities and posts them on Company's website. The Company's website provides for separate section for investors where relevant shareholders information is available. The Management Discussion & Analysis Report forms part of the Annual Report.
VII. General Shareholder Information
1. Annual General Meeting
Date : 22nd September, 2015
Time : 11.00 a.m.
Venue : Hotel Silver Avenue, Ostwal Empire, Next to Big Bazar, Boisar (West), Thane- 401 501, Maharashtra
2. Financial Calendar (Tentative)
Financial Year of the Company 01st April, 2015 to 31st March 2016
Results for the Quarter ending:
June 30, 2015 On or before 14th August, 2015
September 30, 2015 On or before 14th November,2015
December 31, 2015 On or before 14th February,2016
March 31, 2016 On or before 15th May, 2016 or 30t h May, 2016
3. Date of book Closure: 18th September, 2015 to 22nd September, 2015 (Both days inclusive)
4. Dividend Payment Date:
Final Dividend, if declared, shall be paid/credited on or after 22nd September, 2015.
5. Listing of Equity Shares on the Stock Exchange
1. Bombay Stock Exchange Limited. P.J.Towers, Dalal Street, Fort Mumbai 400 001
2. National Stock Exchange of India Limited. Exchange Plaza, Bandra-Kurla Complex, Bandra (East) Mumbai 400 051 Listing Fees as applicable have been paid.
(a) Stock Exchange Stock Code
1. Bombay Stock Exchange Ltd. 505509
2. National Stock Exchange of India Ltd RESPONIND
(b) Demat ISIN Number in NSDL & CDSL for Equity Shares INE688D01026
. Registrar and Transfer Agents:
Shareholders correspondence should be addressed to the Registrar and Transfer Agents of the company at the following Address:
Link Intime India Private Ltd., C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai- 400078. Tel No.: 91(022) 25963838 Fax No.: 91(022) 25946969 E-mail: firstname.lastname@example.org Website :www.linkintime.co.in
10. Share Transfer System:
100% equity shares of the Company are in electronic form. Transfers of these shares are done through the depositories with no involvement of the Company.
As required by clause 47 (c) of the Listing Agreements entered into by the Company with the Stock Exchanges, a certificate is obtained every six months from a Practicing Company Secretary with regard to, inter alia, effecting transfer, transmission, sub-division, consolidation, renewal and exchange of equity shares within fifteen days of their lodgment. The certificate is also filed with BSE & NSE where the equity shares of the Company are listed.
13. Dematerialization of shares and liquidity
As of 31st March 2015, 266912700 Equity Shares representing 100% of the paid up equity capital of the company have been dematerializedwith the following depositories:
14. Outstanding GDRs/ADRs/Warrants or any convertible Instruments
As of date the Company has not issued these types of securities.
15. Reconciliation of Share Capital Audit Report
A qualified Practicing Company Secretary carries out secretarial audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited and the total issued and listed equity share capital. The audit confirms that the 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
16. Registered Office & Plant Location
Village Betegaon ,Mahagaon Road, Boisar (E), Tal. Palghar, Dist. Thane- 401501.
17. Address for correspondence:
Shareholders should address correspondence to the Company's Registrars and Transfer Agents at the address mentioned below. Shareholders could also contact the Registered Office of the Company at the address mentioned below.
Registrar &Transfer Agents:
Link Intime India Private Ltd., C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai-400078. Tel No.: +91 22 2596 3838 Fax No.: +91 22 2594 6969 E-mail: email@example.com Website : www.linkintime.co.in
Village Betegaon, Mahagaon Road, Boisar (E), Tal. Palghar, Dist. Thane-401501 T:- +91 22 6656 2821 F:- +91 22 6656 2798 E:- firstname.lastname@example.org Website: www.responsiveindustries.com
Pursuant to the provisions of Section 205C of Companies Act, 1956, the amount of dividend remaining unpaid / unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) administered by the Central Government. Given below are the dates of declaration of dividend and corresponding dates when unpaid / unclaimed dividends are due for transfer to the IEPF:
19. Practicing Company Secretary's Certificate on Corporate Governance
As required under Clause 49 of the Listing Agreement, M/s. P.P. Shah & Co., Practicing Company Secretary has verified the compliance of the Corporate Governance norms by the Company. Certificate issued by him in this regard is annexed hereto.
For and on behalf of the Board,
Chairman & Whole Time Director
Place : Mumbai
Date : 26th May, 2015