REPORT ON CORPORATE GOVERNANCE
COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
The Company's philosophy on Corporate Governance envisages the attainment of high levels of transparency, accountability, fairness and equity in all facets of its operations, procedures and reporting systems. Management aims to achieve greater efficiency and remain to competitive in comparison with the peers in the Industry.
Shiva Texyarn Limited has adopted a Code of Conduct which lays down standards of values, ethics and prudent business principles of management.
BOARD OF DIRECTORS
The Board comprises of Nine Directors viz., One Managing Director, One Executive Director and Seven Non-Executive Directors. Five Directors are Independent Directors and have no business relationship with the Company.
During the financial year, 4 Board Meetings were convened by giving advance notices to the Directors. The meetings were held on 21.5.2014, 14.8.2014, 14.11.2014 and 14.2.2015.
The Non-Executive Independent Directors fulfill the conditions laid down for appointment as Independent Directors as specified in Section 149 of the Companies Act, 2013 and rules made thereunder and Clause 49 of the Listing Agreements entered with the Stock Exchanges. A formal letter of appointment has been issued and a copy of the same is posted on website of the Company viz., www.shivatex.co.in
At the time of appointment of Di rectors a formal letter of appointment is issued, which sets out roles, functions, duties and responsibilities expected from them. The Directors have also been explained the relevant regulations. The appointments are also provided with necessary information for him to understand the Company's operations, products and events relating to the Company.
CODE OF CONDUCT
The Company has adopted the code of conduct for all Board Members and Senior Management as required under Clause 49 of the Listing Agreement. The code is posted on the company's website at www.shivatex.co.in All Board Members and Senior Management personnel have affirmed compliance with the code on an annual basis and a declaration to this effect signed by the Chairman and Managing Director is attached to this report.
The Audit Committee consists of the following 4 Directors, of whom 3 are independent. During the financial year the Audit Committee met 4 times on 19.5.2014, 12.8.2014, 8.11.2014 and 12.2.2015 and the attendance of each member is furnished below :
The Audit Committee Chairman was present at the last Annual General Meeting.
The terms of reference of the Audit Committee are as set out in Clause 49 of the Listing Agreement, which inter-alia includes the following:
The term of references to the Audit Committee inter alia include the followings:
a) 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;
b) Recommendation for appointment, remuneration and terms of appointment of auditors of the company;
c) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
d) Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
i) 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.
ii) Changes, if any, in accounting policies and practices and reasons for the same.
iii) Major accounting entries involving estimates based on the exercise of judgment by management
iv) Significant adjustments made in the financial statements arising out of audit findings
v) Compliance with listing and other legal requirements relating to financial statements
vi) Disclosure of any related party transactions
vii) Qualifications in the draft audit report
e) Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
f) 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;
g) Review and monitor the auditor's independence and performance, and effectiveness of audit process;
h) Approval or any subsequent modification of transactions of the company with related parties;
i) Scrutiny of inter-corporate loans and investments;
j) Valuation of undertakings or assets of the company, wherever it is necessary; k) Evaluation of internal financial controls and risk management systems;
l) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
m) 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;
n) Discussion with internal auditors of any significant findings and follow up there on;
o) 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;
p) 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;
q) 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;
r) To review the functioning of the Whistle Blower mechanism;
s) 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;
t) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of 3 Directors, all of whom are independent. The constitution of Nomination and Remuneration Committee has become operational with effect from 21.5.2014. The Committee has met 2 times on 12.8.2014 and 16.3.2015.
The terms of reference specified by Board of Directors to the Nomination and Remuneration Committee are as under:
a) Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down and also recommend to the Board a Policy relating to the Remuneration of Directors, Key Managerial Personnels and other employees.
b) Formulating the policy for determining qualification, positive attributes and independence of a Director.
c) To formulate criteria for evaluation of Independent Directors and the Board.
d) To devise a policy on Board diversity.
The Nomination and Remuneration Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors/Key Managerial Personnels/Senior Managerial Personnels. The policy is accordingly derived from the said Charter. The policy on remuneration is available in the following weblink :
<http://www.shivatex.co.in/admin/upload/27012015044903STYL-Remuneration.pdf> Evaluation criteria
The Nomination and Remuneration Committee has formulated the methodology and criteria to evaluate the performance of the Board and each Director. The evaluation of the performance of the Board and its committees are evaluated through a questionnaire circulated to all directors and based upon the response to the questionnaire, the directors do a self evaluation of their performance. Accordingly Board reviewed the performance of each of the directors and expressed their satisfaction.
The performance evaluation of the Chairman and the Managing Director was carried out separately by the Independent Directors. The Independent Directors expressed their satisfaction on the performance of the Chairman and the Managing Director
Remuneration paid to Directors:
All the Non-Executive Directors are paid a sitting fee of Rs. 5,000/- for each Board Meeting attended by them. The members of Audit Committee are also paid a sitting fee of Rs. 5,000/- for each committee meeting attended by them.
Smt A Lalitha, Director was paid a remuneration of Rs. 26.50 Lakhs during the year.
Meeting of Independent Directors
During the year under review the Independent Directors met on 16.3.2015 for the following purposes: v Evaluation of performance of non- Independent Directors and the Board as a whole v Evaluation of performance of the Chairman and Managing Director of the Company v Evaluation of quality and flow information to the Board
All the Independent Directors were present at the meeting.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted Corporate Social Responsibility Committee which shall recommend to the Board, the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, recommend the amount of expenditure to be incurred on such activities and monitor the CSR policy of the Company. The company has partially spent the amount stipulated under the requirements of the Act. Corporate Social Responsibility Committee constituted consisting of the following Directors with effect from 21.5.2014.
1. Sri S V Alagappan - Managing Director
2. Sri S K Sundararaman - Executive Director
3. Dr K R Thillainathan - Independent Director
RELATED PARTY TRANSACTIONS
The Company has adopted policy on dealing with Related Parties. The same is disclosed in the website of the Company and is available in the following weblink: <http://www.shivatex.co.in/admin/upload/27012015044746STYL-RPT.pdf>
RISK MANAGEMENT COMMITTEE
Risk Management Committee constituted with effect from 14.11.2014, consists of foll owing members they are specifically engage with implementing, monitoring the risk management plan of the Company and other related functions.
1. Sri S K Sundararaman - Executive Director
2. Sri S Palaniswami - Independent Director
3. Sri S Seshadri - Chief Financial Officer
WHISTLE BLOWER MECHANISM
The Company has established a whistle blower policy/vigil mechanism for Directors and Employees to report concerns about unethical behavior, actual or suspected incidents of fraud or violation of the code of conduct or ethics policy. This mechanism provides adequate safeguards against victimization of directors/employees who avail of the mechanism and also provide for d irect access to the Chairman of the Audit Committee. The whistle blower policy is posted on the company's website at the linkwww.shivatex.co.in
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee was formed to specifically look into shareholders/investors complaints, if any, on transfer of shares, non-receipt of Annual Report, non-receipt of declared dividend, etc., and also the action taken by the Company on those matters. During the financial year the Committee met 4 times and the attendance of each member is furnished below:
Smt M Shyamala, Company Secretary is the Compliance Officer.
The Company has not received any complaints from the Investors for redressal during the year and there was no complaint pending at the beginning of the year for redressal. No share transfer was pending as on 31.3.2015.
In terms of Clause 5A II of the Listing Agreement, entered into with Stock Exchanges, the Company has opened Demat Suspense Account in the name of "Shiva Texyarn Limited - Unclaimed shares Demat Suspense Account" and
the shares remaining unclaimed will be transferred to the said account, after due reminders to the shareholders.
CEO & CFO CERTIFICATION
The Managing Director and Chief Financial Officer (Head of fi nance function) have furnished a certificate to the Board of Directors relating to financial statement and internal controls and systems as prescribed under Clause 49 of the Listing Agreement and Board took the same on record.
In compliance with SEBI Regulations for prevention of Insider Trading the Company has framed a comprehensive Code of Conduct. The Code lays down guidelines and procedures to be followed and disclosures to be made by the management staff while dealing with the shares of the Company.
? The Company has not entered into any transaction of a material nature with the related parties having potential conflict with the interest of the Company.
? There was no instance of non-compliance of any matter related to the capital markets during the last 3 years.
? The Company has a Whistle Blower Policy in place and no personnel has been denied access to the Audit Committee and
? The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement and in respect of Non-mandatory requirements the Company has complied all the conditions excepting the suggestion relating to appointment of separate persons to the post of Chairman and Managing Director/CEO.
MEANS OF COMMUNICATION
I) The quarterly/half-yearly/annual financial results of the Company are announced within the stipulated period and are normally published in English and Tamil Newspapers. The results were also displayed in company's website www.shivatex.co.in <http://www.shivatex.co.in>
ii) The Management Discussion and Analysis forms part of this Annual Report.
Annual General Meeting
Day and Date : Monday, 28 September, 2015
Time : 10.15 AM
Venue : Nani Kalaiarangam Mani Higher Secondary School Pappanaickenpalaym Coimbatore - 641 037
Results Announced : 30.5.2015
Posting of Annual Report : On or before 30.8.2015
Last date of receipt of Proxy forms : 26.9.2015
Dividend payment date : On or before 10.10.2015
Announcement of Quarterly Results : During First/Second week of August and November 2015; February and May 2016 or as stipulated by SEBI from time to time
Date of Book Closure for the purpose of Dividend and Annual General Meeting
22.9.2015 to 28.9.2015 (both days inclusive
The Company's Equity Shares are listed on the following Stock Exchanges :
Exchange Stock Code
BSE Limited, Mumbai
Phiroze Jeejeebhoy Towers Dalal Street, Mumbai 400 001
Stock Code : 511108
National Stock Exchange of India Limited
"Exchange Plaza" Bandra-Kurla Complex Bandra (E) Mumbai 400 051
Stock Code : SHIVTEX
The Company has paid Annual listing fees for the year 2015 - 2016.
Outstanding GDRs/ADRs/Warrants or any convertible instruments
The Company has not issued GDRs/ADRs/Warrants or any convertible instruments
DEMATERIALISATION OF SHARES
The shares of the Company are in compulsory demat segment. The Company's shares are available for trading in the depository systems of both the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL). Members have option to hold their shares in demat form (i.e., electronic mode) either through the NSDL or CDSL. As on 31-3-2015, 94.87% of the shares of the Company have been dematerialized. ISIN allotted to our company is INE705C01012. The whole of the Promoters Shareholding has been Dematerialised.
SHARE TRANSFER AGENTS
S K D C Consultants Ltd Kanapathy Towers, 3rd Floor 1391/A-1, Sathy Road Ganapathy Coimbatore - 641 006 Telephone : 0422 6549995, 2539835 - 836 Fax : 0422 2539837 E-Mail : email@example.com
Share Transfer documents, non Receipt of share certificates sent for transfer, nomination forms and change of address may directly be sent to the above address.
SHARE TRANSFER SYSTEM
The Share Transfers in physical form are registered and returned within 15 days from the date of receipt if the documents are in order. The share transfers are approved by the Share Transfer Committee who usually meets twice in a month.
Spinning Unit – I
Velvarkottai Village Dindigul District Tamilnadu
Spinning Unit – II
Kodangipalayam Village Karadivavi Road, Paruvai Post Coimbatore District, Tamilnadu
Kodangipalayam Village Karadivavi Road, Paruvai Post
Coimbatore District, Tamilnadu
Factory E-16, P-11 SIPCOT Industrial Growth Estate Perundurai, Erode 638 052 Tamilnadu
5/177, Opp Power House Karadivavi, Palladam Taluk Tirupur District 641 658
Lamination Unit : S.F. No. 371/5, Karadivavi Road Paruvai Post, Karanampet Palladam - 641 658
Bag Unit : S.F No. 371/5, Karadivavi Road Paruvai Post, Karanampet, Palladam 641 658
Munduvelampatti Village Erode District Tamilnadu
Gudimangalam Athukinathupatti & Uthukuli Villages Coimbatore District, Tamilnadu
Sanganeri Tirunelveli District Tamilnadu
ADDRESS FOR CORRESPONDENCE
Non-receipt of dividend, Registration of Power of Attorney, status change, transmission, consolidation, split and other queries may directly be sent to the following address:
The Company Secretary
Shiva Texyarn Limited, Regd Office: 252 Mettupalayam Road, Coimbatore 641 043 Tamilnadu
By Order of the Board
S V ALAGAPPAN
CHAIRMAN AND MANAGING DIRECTOR
Date : 30th May, 2015
place : Coimbatore