CORPORATE GOVERNANCE REPORT
I. COMPANY PHILOSOPHY
The Company's philosophy on Corporate Governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operations and in all interactions with its stakeholders, including shareholders, employees, the government and the society in general. Accordingly, this Company philosophy extends beyond what is reported under this Report and it has been the Company's constant endeavor to attain the highest levels of Corporate Governance.
This report is for compliance of Clause 49 of the Listing Agreement, which the Company has entered into with the Stock Exchanges.
II. BOARD OF DIRECTORS
In terms of the Company's Corporate Governance Policy, all statutory and other significant and material information including information mentioned in Annexure IA of Clause 49 of the Listing Agreement are placed before the Board to enable it to discharge its responsibilities of strategic supervision of the Company with due compliance of laws and as trustees of stakeholders.
At present the Board of Directors of the Company consists of five (5) members, all of whom are 'Non-Executive' & Independent Directors.
During the year under review, Mr. Paras. K. Chowdhary, Mr. Suresh Mathew and Mr. H. N. Singh Rajpoot were appointed with effect from February 11, 2010 as Additional Directors. Mr. Kishore Shete and Mr. A. V. Nerurkar resigned as Directors of the Company from February 11, 2010 and April 3, 2010 respectively.
During the year under review, 13 meetings of the Board were held on 28.04.2009, 05.06.2009, 27.06.2009, 10.07.2009, 24.07.2009, 28.07.2009, 30.10.2009, 19.12.2009, 24.12.2009, 01.01.2010, 11.02.2010, 27.03.2010 and 30.03.2010.
3. Details Of Directors Proposed To Be Appointed / Reappointed at the Forthcoming Annual General Meeting:
A. Mr. Ramesh D. Chandak
Mr. Ramesh D. Chandak (64 years) is a Chartered Accountant and is a Fellow member of the Institute of Chartered Accountants of India. Mr. Chandak has rich and varied experience of working with Textile, Edible Oil and Engineering Industries in various countries. He is at present the Managing Director of KEC International Limited, one of the leading engineering and infrastructure companies in India with operations globally. Prior to joining KEC International Limited, he was associated with Nalin Industries, Malaysia & Universal Edible Oil Inc, USA.
• Hilltop Infrastructure inc, USA
• KEC International Limited
• KEC Global FZ LLC/ UAE
• Raychem RPG Limited
• Spencer International Hotels Limited
B. Mr. Paras. K. Chowdhary
Mr. Paras Kumar Chowdhary (59 years) holds a Bachelors degree in Physics (Hons) and has over 36 years experience in senior management positions in the tyre industry. He started his career with Apollo Tyres Limited where he finally held the position of President and Whole-Time Director. Mr. Chowdhary is presently the Managing Director of CEAT Limited (CEAT), a position he has held since 2001 and has been responsible for several milestones achieved by CEAT over these years. He has successfully steered CEAT to great heights, highest ever turn over and profits in the recent time.
Mr. Chowdhary is quite active in the functioning of the Automotive Tyre Manufacturers Association and has also served this organization as its President in the past.
• ACT Company (Pvt) Limited, Colombo
• Associated CEAT (Pvt) Limited, Colombo
• Associated CEAT Holdings Company (Pvt) Limited, Colombo
• Associated CEAT Kelani Radials (Pvt) Limited, Colombo
• CEAT Limited
• CEAT Kelani Associated Holdings (Pvt) Limited, Colombo
• CEAT Kelani International (Pvt) Limited, Colombo
• Harrisons Malayalam Limited
• Phillips Carbon Black Limited
• RADO Tyres Limited
• Sea Princess CHSL
• Spencer International Hotels Limited
C. Mr. Suresh Mathew
Mr. Suresh Mathew (44 years) is a Chartered Accountant with over 21 years of post qualification experience in various segments of industry. He has had experience in several functions like projects, corporate finance, financial services and general management within key industries such as commodities, pharmaceuticals and manufacturing. Mr. Mathew graduated in Commerce from the Madras University after which he became an associate member, and is currently a Fellow Member of the Institute of Chartered Accountants of India. He has also served on the Finance Committee of the United Planters' Association of South India (UPASI), a premier industry body.
• Blue Niles Holdings Limited
• Ice Stone Coffee & Dessert Limited
• Instant Holdings Limited
• RPG Telephone Limited
D. Mr. H. N. Singh Rajpoot
Mr. H. N. Singh Rajpoot (53 years) is a science graduate and masters in Economics. He is also a qualified Company Secretary, a Cost Accountant and a graduate in law with over 32 years of experience in corporate laws, securities laws, finance and commercial functions with corporates of repute both in private and public sector including National Textile Corporation of UP Limited, Kanpur and the Pradeshiya Industrial and Investment Corporation of UP Limited, Lucknow, a state level financial institution.
He has been actively involved in the functioning of professional bodies and Industry forums. In the past, he was a Member of the Finance and Banking Committee of PHD Chambers of Commerce and Industry, New Delhi. He has also served the profession of Company Secretaries for more than a decade through his close association with the Institute of the Company Secretaries of India (ICSI), initially as the Hon. Secretary, Vice chairman and Chairman of the Kanpur and Lucknow Chapters of Northern India Regional Council (NIRC) of ICSI and later, as the Hon. Vice Chairman of the Professional Development Committee of NIRC of ICSI. Currently, he is the member of the Capital Markets Committee of the Bombay Chamber of Commerce and Industry, Mumbai and Corporate Law Committee of the Federation of Indian Chambers of Commerce and Industry, New Delhi.
• Atlantic Holdings Limited
• Basic Tele Services Limited
• e-RPG Ventures Limited
• FGP Limited
• Ice Stone Coffee & Dessert Limited
• Malabar Coastal Holdings Limited
• RPG Paging Services Limited
• RPG Telephone Limited
III. COMMITTEES OF THE BOARD
1. Audit Committee
The role, powers, functions and the terms of reference of the Audit Committee specified by the Board are in conformity with the requirements of Clause 49 of the Listing Agreement as well as Section 292A of the Companies Act, 1956. The Committee acts as a link between the Statutory Auditors and the Board of Directors. The responsibilities of the Audit Committee include overseeing of the financial reporting process to ensure fairness, adequate disclosures and credibility of financial statements, recommendation of appointment and removal of statutory auditors, review of the adequacy of internal control systems and the internal audit function.
The Company has complied with the requirements of Clause 49 (II) (A) as regards the composition of the Audit Committee. At present the Audit Committee of the Company consists of 3 members; Mr. Suresh Mathew, Mr. H. N. Singh Rajpoot and Mr. Paras. K. Chowdhary. Mr. Suresh Mathew is the Chairman of the Audit Committee. All the members of the Audit Committee have good knowledge of finance, accounts and Company law and general management.
The Company Secretary also functions as the Secretary of the Committee.
2. Shareholders/Investor Grievance Committee IV
The functions and powers of the Committee include review and address the complaints, queries of all investors and to ensure that the same are expeditiously responded to and redressed accordingly. The Committee has to also review and deal with the responses to letters received from the Statutory Authorities such as the Stock Exchanges, Securities & Exchange Board of India and the Ministry of Corporate Affairs.
The Committee consists of 3 members, Mr. H. N. Singh Rajpoot, Mr. Aditya Atal and Mr. Suresh Mathew. Mr. H. N. Singh Rajpoot is the Chairman of the Committee. The Company Secretary functions as the Secretary of the Committee.
1. Disclosures on materially significant related party transactions that may have potential conflict with the interests of Company at large
There were no material and/or significant transactions during the period that were prejudicial to the interest of the Company.
2. Disclosures of Related Party Transactions
Details of related party transactions are included in the Notes to the Accounts as per Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India.
3. Disclosure of Accounting Standards
The Company has followed the Accounting Standards issued by the Institute of Chartered Accountants of India, to the extent applicable, in the preparation of the financial statements.
4. Disclosure of Risk Management
The Company has laid down procedures to inform Board Members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risks through means of a properly defined framework.
5. Details of non-compliance by the Company, Penalties, Strictures imposed on the Company by Stock Exchange(s) or Securities Exchange Board of India (SEBI) or any other statutory authority or any matters related to Capital Markets.
There are no penalties or strictures imposed on the Company by the Stock Exchanges or SEBI or any statutory authorities relating to the above.
6. Details of compliance with mandatory requirement
Clause 49 of the Listing Agreement mandates to obtain a certificate from either the Auditors or practicing Company Secretaries regarding compliance of conditions of corporate governance as stipulated in the Clause and annex the certificate with the Directors' Report, which is sent annually to all the shareholders. The Company has obtained a certificate from its Statutory Auditors to this effect and the same is given as an annexure to the Directors' Report.
VI MEANS OF COMMUNICATION
The Company would be publishing its quarterly financial results to the Stock Exchanges and publishing the same in the newspapers as per Clause 41 of the Listing Agreement on the shares of the Company being listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
VII GENERAL SHAREHOLDER INFORMATION
• AGM: Date, time and venue
As indicated in the notice accompanying this Annual Report, the Annual General Meting of the Company will be held on Thursday, September 30, 2010 at 11.00 a.m. at The Auditorium, Textiles Committee, next to Trade Plaza (TATA Press), P. Balu Road, Prabhadevi Chowk, Prabhadevi, Mumbai -400 025
• Financial Year
The Company follows 1st April to 31st March as the financial year.
• Date of Book Closure
Tuesday, September 14, 2010 to Thursday, September 30, 2010
• Dividend Payment Date
The Directors of the Company have not recommended any dividend for the period under review.
• Listing on Stock Exchanges
The Company has applied for the listing of the shares on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.
The Listing fees have been paid to the Stock Exchanges for the financial year 2010-2011.
• Compliance Officer
Ms. Shruti Joshi Company Secretary
Summit Securities Limited CEAT Mahal,
463, Dr Annie Besant Road Worli, Mumbai 400 030
Tel: 91-22-2493 0621
Fax: 91-22-6660 6039
• Registrar and Share Transfer Agents:
TSR DARASHAW LTD.
6-10, 1st Floor, Haji Moosa Patrawala Industrial Estate, 20, Dr.E. Moses Road, Mahalaxmi, Mumbai - 400 011
1. Bangalore Branch
503, Barton Centre (5th Floor), 84, Mahatma Gandhi Road, Bangalore - 560 001
2. Jamshedpur Branch
Bungalow No.1, "E" Road, Northern Town, Bistupur, Jamshedpur-831 001
3. Kolkata Branch
Tata Centre, 1st Floor, 43, J.LNehru Road Road, Kolkata - 700 071
4. New Delhi Branch
2/42, Sant Vihar, Ansari Road, Daryaganj, New Delhi-110 002
• Share Transfer System
All valid requests for transfer of Equity shares in physical mode received for transfer at the office of the Registrar and Transfer Agents or at the Registered Office of the Company are processed and returned within a period of 30 days from the date of receipt.
Every effort is made to clear share transfers/ transmissions and split and consolidation requests within 21 days.
• Dematerialization of shares and liquidity
The Company has arrangement with National Securities Depository Limited (NSDL) as well as Central Depository Services (India) Limited (CDSL) for dematerialization of shares with ISIN No INE519C01017 for both NSDL and CDSL.
Approximately 63.26% of the Equity share capital corresponding to 68,96,266 Equity shares is held in dematerialized form as of March 31, 2010.
• Outstanding GDRs / ADRs / Warrants / Any Other Convertible Instruments
The Company has not issued any such instruments.
• Code of Conduct
The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company.
All Board Members and Senior Management Personnel have affirmed compliance with the Code for the financial year ended March 31, 2010. A declaration to this effect signed by the Chairman forms part of this Report.